Which of the Following Factors Is Least Important to Capital

question 42

Multiple Choice

Which of the following factors is least important to capital budgeting decisions?

• A) The time value of money
• B) The risk-return tradeoff
• C) Net income based on accrual accounting principles
• D) Cash flows directly resulting from the decision

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Definitions:

Efficacy

The ability to produce a desired or intended result, often used in the context of medications or treatments in clinical trials.

Clinical Trial

A research study that tests how well new medical approaches work in people.

Usual Circumstances

The typical or normal conditions or situations in which something is done or occurs.

Cost-benefit Ratio

An analysis that compares the costs and benefits of an intervention or action, typically expressed as a ratio or a net value.