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When the present value analysis of a proposed investment results in an indication the proposal has a rate of return greater than the cost of capital, the investment may not be made because:

a. the quantitive analysis indicates that it should not be made

b. management assessment of qualitatitve factors overrides the quantitive analysis

c. the timing of the cash flows of the investment will not be as assumed in the present value caculation

d. post audits of prior investments have revealed that cash flow estimates were consistenly less then actual cash flows realized.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9284005

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