The Proper Time to Harvest an Asset Is When

question 15

Multiple Choice

The proper time to harvest an asset is when:

• A) the percentage NPV increase of harvesting a project at a future point in time is at the last date where the increase is greater than the cost of capital.
• B) the percentage NPV increase of harvesting a project at a future point in time is at the first date where the increase is less than the cost of capital.
• C) the percentage NPV increase of harvesting a project at a future point in time is at the first date where the increase is greater than the cost of capital.
• D) None of the above.

---

Definitions:

Accounting Profit

The net income of a company calculated by deducting all operational and overhead costs from total revenue, according to generally accepted accounting principles.

Accounting Profit

Accounting profit is the net income for a company calculated by subtracting total expenses from total revenues, according to generally accepted accounting principles.

Explicit Costs

Payments made directly to individuals or entities for wages, rent, and materials as part of business operations.

Items

Individual objects, products, or units that are part of a list, collection, or inventory available for sale or distribution.