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One Limitation of Traditional Capital Expenditure Analysis Is 'Unrealistic Status

Question 88

Multiple Choice

One limitation of traditional capital expenditure analysis is 'unrealistic status quo'. This refers to:


A) the assumption that the tax rate remains unchanged throughout the life of an investment.
B) the assumption that the cost of capital remains unchanged throughout the life of an investment.
C) unrealistic estimates of expected time horizon of a project.
D) the assumption that the current cash flow of the company will remain unchanged if the proposed investment does not go ahead.

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