Which of the following is not a factor in explaining why the present value of a future dollar is less than one dollar? A. Interest B. Inflation C. Risk of failure to receive expected cash inflows D. Historic cost

Which of the following is not a factor in explaining why the present value of a future dollar is less than one dollar? A. Interest B. Inflation C. Risk of failure to receive expected cash inflows D. Historic cost

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Which of the following is not a factor in explaining why the present value of a future dollar is less than one dollar?
A. Interest
B. Inflation

C. Risk of failure to receive expected cash inflows

D. Historic cost

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

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