Question: While computing the net present value of potential projects, organizations include the discount factor to calculate the net cash flows throughout the lifetime of the

While computing the net present value of potential projects, organizations include the discount factor to calculate the net cash flows throughout the lifetime of the project's deliverables. Which one of the following best describes the reason for using the discount factor? Some stakeholders may ask about the utilization of the discount factor. It is a legal requirement to use the discount factor to avoid any penalties. Money loses its value as time passes due to the inflation rate and the rate of required return (opportunity cost). It can offer a better reasoning process while more than one project is assessed

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Select one of the capital investment evaluation methods described in Chapter 10 of your text. Fully explain the capital evaluation method?s strengths and weaknesses. Take a position and defend the...

BLC Inc. is a medium-sized manufacturing company based in the UK. The company operates mainly in the London area and is based in Peterborough. At a recent board meeting, the company decided to expand...

I have a toturial credit , I need some one tell teach me from question 85 to 140 5.The changes in the firm's future cash flows that are a direct consequence of accepting a project are called: A)...

The monochromatic emissivity of a diffuse-surface at 1600 K varies with wavelength in the following manner : = 0.4 for 0

White Ltd commenced trading on 1 July Year 3 and draws up its accounts for the year ended 30 June Year 4. During its first year of trading the company pays total telephone expenses of 3,500. The...

Wrong direction An Ipsos/Reuters poll of 2214 U.S. adults voters in April and May 2017 asked a standard polling question of whether the United States was headed in the Right Direction or was on the...

For testing hypotheses about the mean of a population, under what conditions does the sampling distribution of the test statistic follow a ???? distribution?

In addition to the reasons listed in the chapter, what other issues or events might cause an organization that does not have a formal IS vision recognize the need for developing one?

Blackboard BB Remaining Time: 1 hour, 54 minutes, 43 seconds. Question Completion Status: The following comparative balance sheet is given for Estern Co.: Assets Dec 31, 2021 Dec 31, 2020 Cash...

Evidence-based HRM involves: * 1 point popular press articles. knowledge gained by a limited number of testimonials. intuition and brainstorming. philosophical arguments of principle. data, facts,...

1. The form of competition applies to price, speed, quality, flexibility and innovation. Please explain the form of competition as mentioned earlier in the FnB2. To produce a superior quality product...

have taken a snip of the problem and my coding. My code does not include the residual row and the values that come from my code do not match the output. 5.6 LAB: Regression with categorical...

This week I would like you to work on the "Effective Stress Management" portion of developing yourself as a leader. Think of stress management from two opposing perspectives: stress situations...

Given in (a) & (b) are stress states of an element. Are these elements in equilibrium? If not, what are the body forces needed to make the current stress state an equilibrium stress state? (a) -x+y...

Would the application of a Just-In-Time production system affect how aggregate planning is conducted? Why? How?

Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. You are in the process of buying 1.000 shares of Alpha Corp at $10 a share and adding it to...

Briefly describe the following types of group life insurance plans: a. Group term life insurance b. Group accidental death and dismemberment insurance (AD&D) c. Group universal life insurance d....

In 1984 the country of Morocco in an attempt to determine the average amount of time that tourists spend in that country on a visit tried two different sampling procedures. In one, they questioned...

To prove Eq. (7.25), define the following notation: X j i time spent in state i on the j th visit to this state; Ni(m) number of visits to state i in the first m transitions In terms of this...

In a semi-Markov process, let tij denote the conditional expected time that the process spends in state i given that the next state is j . (a) Present an equation relating i to the tij . (b) Show...