Which of the Following Statements Is True Regarding Cash Flows

question 15

Multiple Choice

Which of the following statements is true regarding cash flows that a firm must estimate to decide if it should go ahead with a project?

• A)In most cases,the cash flows will be positive at first,because the firm is yet to invest heavily in production facilities.
• B)After some initial period the cash flows becomes negative as investment costs increase and revenues stabilize.
• C)Once the cash flows have been estimated,they must be discounted to determine their net present value using an appropriate discount rate.
• D)If the net present value of the discounted cash flows is less than zero,the firm should go ahead with the project.

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Definitions:

Authoritarian Parents

Parents who enforce strict rules and demand obedience, often with little warmth or communication.

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Parents who are extremely and uncritically fond of their children, often to the point of indulging them excessively.

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A group of structures involved in memory, motivation, and emotion that forms a fringe along the inner edge of the cerebrum.

Amygdala

A part of the brain's limbic system involved in emotion processing, fear responses, and memory.