When Using One of the Discounted Cash Flow Methods to Evaluate

question 86

Multiple Choice

When using one of the discounted cash flow methods to evaluate the desirability of a capital budgeting project,which of the following factors is generally not important?

• A)method of financing the project under consideration
• B)timing of cash flows relating to the project
• C)impact of the project on income taxes to be paid
• D)amounts of cash flows relating to the project

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Definitions:

Substitute Good

A product or service that consumers can use in place of another product or service, often when prices rise or the original becomes unavailable.

Wood Pulp

A material prepared from wood by a chemical or mechanical process used in the production of paper and cellulose products.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price within a specified time period.

Quantity Demanded

the total amount of a good or service that consumers are willing and able to purchase at a given price in a specified period.