The Basic Capital Budgeting Principles Involved in Determining After-Tax Incremental

question 165

Multiple Choice

The basic capital budgeting principles involved in determining after-tax incremental operating cash flows require us to:

• A)include sunk costs, but ignore opportunity costs.
• B)include opportunity costs, but ignore sunk costs.
• C)ignore both opportunity costs and sunk costs.
• D)include both opportunity and sunk costs.

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Definitions:

Voltage Drop

The decrease in voltage along a conductor or component while it conducts electric current.

Applied Voltage

The electrical potential difference purposely introduced across a device or component, driving the current through it.

Resistance

An electrical quantity that measures how the device or material reduces the electric current flow through it, measured in Ohms (Ω).

Voltage Across

The electrical potential difference between two points in a circuit, driving the flow of current between those points.