Which of the Following Is Not a Step in the Net

question 2

Multiple Choice

Which of the following is not a step in the net present value approach to capital budgeting?

• A)Identify the amount and timing of each cash flow.
• B)Determine the appropriate discount rate.
• C)Compare the discount rate to the hurdle rate.
• D)Calculate the net present value of the project.

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Definitions:

Abuse of Discretion

A legal term indicating a failure to take into proper consideration, the facts and law relating to a particular matter; an arbitrary or unreasonable departure from precedent and settled judicial custom.

State Law

Laws that are enacted and enforced by the individual states in a country, differing from federal or national laws.

Interstate Commerce

The buying, selling, or moving of products, services, or money across state lines, regulated by federal law.

Undue Burden

A legal standard used to determine whether a law or its enforcement is excessively burdensome or restrictive on an individual or group.