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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