Which of the Following Is True of Discounted Cash Flow

question 63

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 comply with the requirements of GAAP.

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Definitions:

Intellectual Property

Legal rights that result from intellectual activity in the industrial, scientific, literary, and artistic fields.

Life Cycle

The series of stages through which something (such as a living being, a product, or a project) goes from its beginning to its end.

Supply Curve

a graphical representation showing how the quantity supplied of a good or service varies with its price.

Marginal Cost

The expense incurred by producing one additional unit of a product.