When Using the Net Present Value Method to Compare Keeping

question 51

Multiple Choice

When using the net present value method to compare keeping an old building or disposing of it and acquiring a new building, the current cash residual value of the old building should be

• A) a subtraction from the price paid for the new building.
• B) viewed as a cash flow.
• C) an addition to the price paid for the new building.
• D) irrelevant to the decision.

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