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:

Self-sufficient

The ability of an individual, household, or community to provide for all their essential needs without relying on external resources.

Specializes

Refers to the focus of a business, region, or economy on the production of a limited scope of goods or services to gain a greater degree of efficiency.

System of Exchange

A structured arrangement through which trade is conducted, often involving a medium of exchange such as money.

International Trade

The exchange of goods and services across international borders or territories, which involves the importation and exportation of goods.