The Steps of the Net Present Value Method for Making

question 96

Multiple Choice

The steps of the net present value method for making long-term decisions include

• A)estimate the amounts of future cash inflows and future cash outflows in each period for each alternative under consideration.
• B)requiring the use of the applicable treasury rate as the discount rate in computing the present value of future cash flows.
• C)if the present value of the future cash inflows exceeds the present value of the future cash outflows for a proposal,reject the alternative.
• D)ignore depreciation because it is not a cash flow and does not affects the after-tax cash flow.

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Definitions:

Sedimentary Rocks

Rocks formed by the accumulation and compaction of sediment, often containing fossils and layers that reveal Earth's past environments.

Shale Gas

Natural gas trapped within a relatively nonpermeable shale body, extracted by hydraulic fracturing.

Fine-grained

Describing materials or minerals that have small, compact particles or crystals, often used in the context of rocks or sediment.

Low Permeability

Characteristic of materials or rock formations that allow very little fluid to pass through due to small or poorly connected pores.