The Key Input in an NPV Calculation Is

question 44

Multiple Choice

The key input in an NPV calculation is:

• A)project cash flow over the period of the project.
• B)project cash flow for the first year of the project.
• C)initial investment necessary to begin the project.
• D)total investment necessary for the project.

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Definitions:

Collections

The process of pursuing and receiving payments on outstanding accounts receivable from customers.

Payments

The act of transferring money or money's worth from one party to another as a settlement for a transaction or an obligation.

Cash Receipts

Money received by a business, recorded in its financial statements, typically from transactions such as sales or services rendered.

Cash Sales

Transactions where payment is made in cash (or equivalent) at the time of sale, with no delay in payment.