In Decision Trees, Time

question 15

Multiple Choice

In decision trees, time:

• A) is constant
• B) proceeds from bottom to top
• C) proceeds from top to bottom
• D) proceeds from right to left
• E) proceeds from left to right

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Definitions:

Internal Rate Of Return

The discount rate at which the net present value of an investment project is zero; the rate of return of a project over its useful life.

Cash Inflow

The total amount of money being received by a company, often from its main activities such as sales of goods or services.

Investment Required

The amount of capital needed to undertake a project, purchase assets, or start a business to generate future returns.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of shareholder wealth maximization.