The Two Cardinal Rules That Financial Analysts Should Follow to Avoid

question 15

True/False

The two cardinal rules that financial analysts should follow to avoid errors are: (1)in the NPV equation,the numerator should use income calculated in accordance with generally accepted accounting principles,and (2)all incremental cash flows should be considered when making accept/reject decisions for capital budgeting projects.

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Definitions:

Stress

The physical or mental strain or tension resulting from challenging or adverse situations.

Illness

A state of being in poor health, typically as a result of disease, infection, or injury.

Cognitive Tendency

The inclination of individuals to think in certain patterns, often leading to biases or specific ways of processing information.

Genetic Predisposition

The increased likelihood of developing certain diseases or conditions based on an individual's genetic makeup.