Which of the Following Makes Using Present Value Approaches in Capacity

question 44

Multiple Choice

Which of the following makes using present value approaches in capacity decisions difficult?

• A)The discount rate must be adjusted to account for inflation.
• B)Some cash flows are positive and other cash flows are negative.
• C)The payback period might not be long enough to justify a capacity decision.
• D)Capacity decisions are made amidst much uncertainty, so cash flows cannot be estimated with great accuracy.
• E)There is a cash outflow at the outset followed by, possibly, net cash inflows.

---

Definitions:

Wide-Base Aluminum Singles

Single wide base aluminum wheels designed to replace traditional dual wheel setups, offering weight savings and fuel efficiency.

Spec'd

A shorthand or slang term for "specified," referring to the detailed and particular requirements or features of a vehicle or component.

Tandem Drive Axle

A pair of drive axles found on trucks or heavy vehicles, providing additional support and power distribution for handling heavy loads or difficult driving conditions.

Nominal Size

The labeled or advertised dimensions of a component, which may not exactly match its actual, physical size.