Net Present Value Is The

question 21

Multiple Choice

Net present value is the:

• A) current-dollar difference between marginal revenues and marginal costs.
• B) change in net cash flows due to an investment project.
• C) change in before-tax cash flows due to an investment project.
• D) change in net after-tax cash flows due to an investment project.

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Definitions:

GAAP

Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used for financial reporting.

SYD Calculations

Sum-of-Years' Digits method, a form of accelerated depreciation where depreciation is higher in the earlier years of an asset's life.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is used globally to prepare public company financial statements.

Operating Cash Flow

The cash generated by a company’s normal business operations, indicating whether the company can maintain and grow its operations.