In which of the following condition an investment is considered desirable?
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A. B. C. D.D
An investment is considered desirable when it generates a return that is greater than the cost of making the investment. This return can take many forms, such as income, capital appreciation, or a combination of both.
Out of the options provided, only answer A describes a desirable investment condition. This is because it states that the cost of making the investment is less than the future value of present cash flows. This means that the investment is expected to generate more cash in the future than the amount of money that was initially invested.
Answer B, on the other hand, states that the profit is less than the present value of future cash flows. This is not a desirable condition because it implies that the investment is expected to generate less cash in the future than the amount of money that was initially invested.
Answer C states that the present value of future cash flows is less than the cost of the investment. This is also not a desirable condition because it means that the investment is not expected to generate enough cash in the future to justify the amount of money that was initially invested.
Therefore, the correct answer is A: When the cost is less than the future value of present cash flows.