Why is it usually necessary to use the time value of money when performing a cost-benefit analysis?
A) For an investment project to be considered, costs must have a higher dollar value than benefits.
B) In most investment projects, costs are incurred up front, but benefits are received in the future.
C) For practical purposes, a dollar today may be considered to be equal to a dollar at some future time.
D) Although costs and benefits generally occur concurrently, the benefits will accrue value over time, due to interest.
Answer: B
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Answer the following statement true (T) or false (F)
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What is the correct formula in B8 to calculate the after-tax cost of debt?
a) =RATE(B1*B5,B2/B5*B4,-B3*(1-B6),B4)
b) =RATE(B1*B5,B2/B5*B4,-B3*(1-B6),B4)*B5*(1-B7)
c) =RATE(B1*B5,B2/B5*B4,-B3,B4)*B5*(1-B7)
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