CFA® Level 1: CFA® Level 1 Exam - Test Prep

CFA® Level 1 Exam - Test Prep

Prev Question Next Question

Question

Which of the following statements is most correct?

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

C

The replacement chain analysis and the equivalent annual annuity methods lead to the same decision. Depreciation affects a firm's cash flow, which affects its capital budgeting decisions. The project with the highest extended NPV should be chosen. The cost of capital reflects inflation; therefore, project cash flows must be adjusted for inflation.