The Basic Difficulty in Applying the Capital Budgeting Approach to an Acquisition

question 118

True/False

The basic difficulty in applying the capital budgeting approach to an acquisition of a going concern is the estimation of initial cash flows and certain risk consideration.

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Definitions:

Normative

Relates to establishing, relating to, or deriving from a standard or norm, particularly in the context of ethics or societal norms.

Instrumental

Characterized by practicality and utility, often prioritizing efficiency and effectiveness towards achieving a goal.

Rational

Pertaining to actions, decisions, or beliefs that are based on reason or logical analysis rather than emotions or irrational factors.

Collective Nature

The inherent characteristics or behaviors that emerge from the interactions and relationships within groups or societies.