When Using the Net Present Value Method to Compare Keeping

question 124

Multiple Choice

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

• A)deducted from the price paid for the new building.
• B)viewed as a cash outflow.
• C)added to the price of the new building.
• D)irrelevant to the decision.

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Definitions:

Organism's Responding

The manner in which an organism reacts to stimuli or changes in its environment.

Conditioned Response

A learned reaction to a previously neutral stimulus that occurs as a result of conditioning, typically demonstrated in Pavlov’s dog experiment.

Unconditioned Response

A spontaneous, innate response to a trigger that happens without any previous training or conditioning.

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, comes to trigger a conditioned response.