Which of the Following Is a Basic Principle When Estimating

question 89

Multiple Choice

Which of the following is a basic principle when estimating a project's cash flows?

• A) Cash flows should be measured on a pretax basis
• B) Cash flows should ignore depreciation because it is a noncash charge
• C) Only direct effects of a project should be included in cash flow calculations
• D) Cash flows should be measured on an incremental basis

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Definitions:

Motivational State

The internal condition that activates and directs behavior towards achieving specific goals, influenced by desires, needs, and ambitions.

Homeostasis

The ability of an organism to maintain internal equilibrium by adjusting its physiological processes.

Drive-Reduction Theory

A psychological theory that posits motivation is based on the goal of eliminating uncomfortable internal states caused by unmet needs.

Homeostasis

The inclination of a biological system to preserve equilibrium by adapting to conditions ideal for survival.