Using a reasonable and realistic estimate of life expectancy of a capital expenditure is important because: a. Too low of an estimate understates the profitability of the investment.
B) Too high of an estimate could lead to a wasteful use of scarce capital.
C) A profitable opportunity could be rejected if the life expectancy is not reasonable or realistic.
D) Both A and
B) e. A, B and
C)

Question

Quizplus · Accepted Answer

The Answer of Using a reasonable and realistic estimate of life expectancy of a capital expenditure is important because: a. Too low of an estimate understates the profitability of the investment.
B) Too high of an estimate could lead to a wasteful use of scarce capital.
C) A profitable opportunity could be rejected if the life expectancy is not reasonable or realistic.
D) Both A and
B) e. A, B and
C)

Using a Reasonable and Realistic Estimate of Life Expectancy of a Capital