In capital budgeting, when the present worth over the respective life of each project is used to select independent projects, all positive net cash flows are assumed to be: (a) Reinvested at the MARR through the end of the shortest-lived project (b) Reinvested at the internal rate of return of the project through the end of the longest-lived project (c) Reinvested at the MARR through the least common multiple of years of all of the projects (d) Reinvested at the MARR through the end of the longest-lived project
In capital budgeting, when the present worth over the respective life of each project is used to select independent projects, all positive net cash flows are assumed to be: (a) Reinvested at the MARR through the end of the shortest-lived project (b) Reinvested at the internal rate of return of the project through the end of the longest-lived project (c) Reinvested at the MARR through the least common multiple of years of all of the projects (d) Reinvested at the MARR through the end of the longest-lived project
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
In capital budgeting, when the present worth over
the respective life of each project is used to select
independent projects, all positive net cash flows
are assumed to be:
(a) Reinvested at the MARR through the end of
the shortest-lived project
(b) Reinvested at the
project through the end of the longest-lived
project
(c) Reinvested at the MARR through the least
common multiple of years of all of the projects
(d) Reinvested at the MARR through the end of
the longest-lived project
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Capital budgeting refers to the process of planning which involves determining and evaluating the potential expenses and investments of a business that are large in nature.
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