Kevin and Annie are each looking at the same cash flow stream. Annie is more patient thanKevin with regard to how she discounts future payoffs. Which of the following statements iscorrect?A. Kevin's NPV for the cash flow will be lower than Annie's.B. Annie and Kevin's NPVS for the cash flow will be the same.C. Annie's NPV for the cash flow will be lower than Kevin's.D. None of the other choices are correct.e

NPV is the net difference between present value of cash inflows and present value of cash outflows.

Answered: looking at the same cash flow stream.

Business

Accounting

looking at the same cash flow stream.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 21Q: A fellow student studying managerial accounting says. The net present value (NPV) weighs early...

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Concept explainers

Short-term Financing

Short-term financing occurs when a company finds an external funding source to run the business for a short period of time that takes less than a year to pay off. Working capital financing is another term for short-term financing. When a company's cash flow from operations is uneven, short-term financing is used to generate cash flow and cover operating expenses. Short-term finance is typically used by businesses to fund inventory, accounts receivable, and loans.

Question

Kevin and Annie are each looking at the same cash flow stream. Annie is more patient than
Kevin with regard to how she discounts future payoffs. Which of the following statements is
correct?
A. Kevin's NPV for the cash flow will be lower than Annie's.
B. Annie and Kevin's NPVS for the cash flow will be the same.
C. Annie's NPV for the cash flow will be lower than Kevin's.
D. None of the other choices are correct.e

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