Question: by Word PG 438 iN PRACTICE , ANSWER THE QUESTION BELOW THAT $40,000 in cash inflow compared to just $5,000 for Gold. We know that

by Word

PG 438 iN PRACTICE , ANSWER THE QUESTION BELOW THAT

by Word PG 438 iN PRACTICE , ANSWER THE QUESTION BELOW THAT

$40,000 in cash inflow compared to just $5,000 for Gold. We know that because money has a time value, it is preferable to receive cash flow sooner rather than later. The payback approach fails to recognize that benefit. Any capital budgeting tool that properly accounts for the time value of money would suggest that project Silver is better for shareholders than project Gold. CHAPTER 10 Capital Budgeting Techniques 439 TABLE 10.2 Relevant Cash Flows and Payback Periods for DeYarman Enterprises' Projects

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