QUESTION 16 In capital budgeting analysis, the riskiness of a project is evaluat

Question

QUESTION 16

In capital budgeting analysis, the riskiness of a project is evaluated to:

determine the multiple internal rates of return from the project.

determine the appropriate rate of return to use for computing the present value of the estimated cash flows.

determine the duration of the project.

determine the role of management to ensure project completion within stipulated time

A.

determine the multiple internal rates of return from the project.

B.

determine the appropriate rate of return to use for computing the present value of the estimated cash flows.

C.

determine the duration of the project.

determine the role of management to ensure project completion within stipulated time

Explanation / Answer

In capital budgeting analysis, the riskiness of a project is evaluated to: determine the appropriate rate of return to use for computing the present value of the estimated cash flows

It tells us whether we will achieve the positive cash flows from the project or not.

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