Which of the Following Is Not an Important Financial Consideration

question 58

Multiple Choice

Which of the following is not an important financial consideration in capital budgeting?

• A)The timing of the investment's future cash flows.
• B)The investment's future profitability.
• C)The sunk costs related to the investment.
• D)The initial cost of the investment and its estimated salvage value.

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Definitions:

At the Money

A term used in options trading to describe an option with a strike price that is identical or very close to the market price of the underlying security.

Employee Stock Options

The right granted to employees by a company to buy its shares at a discounted price or a specific price within a specified time period.

Underwater

A term often used in finance to describe a situation where an asset's market value is less than the balance owed on the loan used to purchase that asset.

American Option

A type of options contract that can be exercised at any time before its expiration date.