The ________ Approach Computes the Differences in Cash Flows Between

question 72

Multiple Choice

The ________ approach computes the differences in cash flows between two alternatives and then finds the present value of these differences.

• A) differential
• B) payback
• C) total project
• D) sensitivity

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Definitions:

Trading Securities

Financial instruments that are purchased by a company not for long-term investment but rather with the intention to trade in the short term for profit.

Unrealized Holding

Gains or losses on investments that a company has not sold yet and hence are not recorded in the financial statements.

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically featuring fixed terms, including interest payments and future repayment of principal.