Which Item Should Be Considered When a Company Estimates the Cash

question 15

Multiple Choice

Which item should be considered when a company estimates the cash flows used to analyze a proposed project?

• A)The new project is expected to reduce sales of one of the company's existing products by 5%.
• B)Since the firm's director of capital budgeting spent some of her time last year to evaluate the new project, a portion of her salary for that year should be charged to the project's initial cost.
• C)The company has spent and expensed $1 million on R&D associated with the new project.
• D)The firm would borrow all the money used to finance the new project, and the interest on this debt would be $1.5 million per year.

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Definitions:

Deferred Imitation

The ability to reproduce a behavior observed at a previous time, even if the model is no longer present.

Priming

A technique in psychology used to train people's memory in both positive and negative ways, often by exposing them to one stimulus to influence their reaction to another stimulus.

Proximal Imitation

The act of copying behaviors or actions that are observed in close proximity.

Mirroring

The behavior in which one person unconsciously imitates the gesture, speech pattern, or attitude of another.