Which of the Following Should Be Considered When a Company

question 29

Multiple Choice

Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project?

• A) The new project is expected to reduce sales of one of the company's existing products by 5%.
• B) Since the firm's director of capital budgeting spent some of her time last year to evaluate the new project,a portion of her salary for that year should be charged to the project's initial cost.
• C) The company has spent and expensed $1 million on research and development costs associated with the new project.
• D) The company spent and expensed $10 million on a marketing study before its current analysis regarding whether to accept or reject the project.
• E) The firm would borrow all the money used to finance the new project,and the interest on this debt would be $1.5 million per year.

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Definitions:

Serotonin

A neurotransmitter that contributes to feelings of well-being and happiness, and is involved in the regulation of mood, appetite, and sleep.

Aggression

Behaviors or actions taken with the intention of causing harm or exerting dominance over another, which can be physical, verbal, or non-verbal.

Neurotransmitters

Chemical messengers in the nervous system that transmit signals between neurons, or from neurons to muscles.

Antisocial Personality Disorder

A mental disorder where a person consistently shows no regard for right and wrong and ignores the rights and feelings of others.