contestada

ignoring differences in the useful lives of investments when evaluating capital expenditure alternatives can distort present value analysis.

Respuesta :

Capricious23

Answer:

Yes, it does.

Explanation:

It definitely impacts the present value analysis. If we are evaluating two proposals and we ignore the useful lives of the investments, then

  • The present values of the investment proposals will be inaccurate.
  • The cash flows might be inaccurate.
  • The discount factor to be used will also be inaccurate.
  • The overall results will be misleading.
  • The tax credits and balancing allowances and charges will also be inaccurate.

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