There's a strong argument that terminal values based on infinite projections shouldn't be used in capital budgeting because of the uncertainty of the distant future. This position maintains that if a project can't be justified in a reasonably long time, it shouldn't be undertaken. The time frame associated with this argument is usually about:
A)5 years.
B)10 years.
C)20 years.
D)None of the above

Question

Quizplus · Accepted Answer

The time frame associated with the argument that terminal values based on infinite projections shouldn't be used in capital budgeting because of the uncertainty of the distant future is usually about 10 years. This is based on the idea that any project that cannot be justified within a reasonable period of time should not be undertaken. While the specific time frame may vary depending on the circumstances, 10 years is a common benchmark for evaluating the economic feasibility of capital investments.

There's a Strong Argument That Terminal Values Based on Infinite