The Appropriate Discount Rate That Analysts Use in Computing the Present

question 89

Multiple Choice

The appropriate discount rate that analysts use in computing the present value of future cash flows is comprised of which of the following?

• A)an increase reflecting the inflation expected to occur over the life of the project.
• B)a risk factor reflecting the riskiness of the project
• C)a pure rate of interest reflecting the productive capability of capital assets
• D)all of the above.

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Definitions:

Alveoli

Clusters of air sacs in which the exchange of gases between air and blood takes place; located in the lungs.

Bronchioles

A part of the respiratory tract that branches from the tertiary bronchi.

Pleura

The membranes that surround the lungs.

Cilia

Microscopic, hair-like structures on the surface of cells that move in a wavelike manner to transport substances or facilitate movement.