What Is the First Step in Applying the Net-Present-Value Method

question 109

Multiple Choice

What is the first step in applying the net-present-value method to investment projects?

• A)Identify the amount and timing of relevant future cash inflows.
• B)Identify the amount and timing of relevant future cash inflows and outflows.
• C)Find the present value of each expected cash flow.
• D)Find the discount rate to use for the project.

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Definitions:

Relevant Testing

Testing that is directly related and appropriate to the purpose for which it is being conducted, ensuring that the results are meaningful for the specific context.

Employment

The condition of having paid work or engaging in a profession or occupation.

IDEA

Individuals with Disabilities Education Act, a U.S. law ensuring services to children with disabilities throughout the nation.

Disability

A physical or mental condition that limits a person's movements, senses, or activities.