What Is the Appropriate Decision to Make It the Present

question 78

Multiple Choice

What is the appropriate decision to make it the present value of the future cash inflows exceeds the present value of the future cash outflows for a proposal?

• A)accept the alternative.
• B)reject the alternative.
• C)find a better alternative.
• D)decrease the firm's cost of capital.

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Definitions:

Most Efficient Output

refers to the level of production at which a firm or economy can produce the maximum amount of goods or services with the least waste of resources and effort.

Total Profit

The financial gain made in a transaction or over a period of time, which equals total revenues minus total costs.

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenues, representing the additional value created beyond all resource costs.

Accounting Profits

The total revenue of a company minus the explicit costs and depreciation expenses.