To Correctly Project Cash Flows, We Need to Consider All

question 105

Multiple Choice

To correctly project cash flows, we need to consider all of the factors EXCEPT:

• A)use of assets or employees already employed by the firm.
• B)the likely impact that the new service or product will have on the firm's existing products' cost and revenues.
• C)the new product's or service's costs and revenues.
• D)All of these are factors that need to be considered.

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Definitions:

Car Loan

A car loan is a financial agreement where a lender provides funds to a borrower for the purchase of a vehicle, which is paid back with interest over a set period.

Compounded Monthly

A method of calculating interest where the interest earned is added to the principal each month, and the next month's interest is calculated on this new total.

Interest Rate

The proportion of a total amount of money that is levied for borrowing it, usually stated as an annual rate.

Annual Return

The percentage of gain or loss on an investment over a one-year period, taking into account both capital gains and dividends.