Which of the Following Is TRUE of Discounted Cash Flow

question 152

Multiple Choice

Which of the following is TRUE of discounted cash flow methods like NPV and IRR?

• A) They use simple interest calculations.
• B) They assume that cash flows will be reinvested when received.
• C) They focus on the payback period.
• D) They must follow the rules of GAAP.

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Definitions:

Ethical Principles

Fundamental beliefs or values that guide behavior and decision-making based on notions of right and wrong.

Acquaintances

Individuals one knows slightly but who are not close friends.

Political Contributions

Financial donations made by individuals or organizations to political parties or candidates to support their campaigns.

Kickbacks

The return of a portion of the money exchanged in a transaction as a secret payment, often as a bribe, for services rendered or to influence decisions.