Which of the Following Is Not an Assumption of the Models

question 9

Multiple Choice

Which of the following is not an assumption of the models that analyse cash flows for capital investment decisions?

• A) It is assumed that all cash flows occur at the same time each year.
• B) It is assumed that all cash flows occur at the beginning of the year.
• C) Cash flows are assumed to be in the same period as accrual accounting revenue and expenses are recognised.
• D) Tax implications of cash flows should be included.

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Definitions:

Consumer

An individual or group that purchases goods or services for personal use, not for manufacture or resale.

Income

Money received, typically on a regular basis, for work or through investments.

Marginal Rate

A term that may refer to the rate at which one variable changes as another variable changes marginally, often used in the context of taxes, substitution, or transformation.

Substitution

The act of replacing one good or service with another in response to shifts in relative prices or changes in consumer preferences.