Posted: September 23rd, 2016

Which one is a true statement and why? Why the others are false.

I have read through my textbook and searched the web. I feel like this is a trick question. Which one is a true statement and why? Why the others are false.

Which of the following statements is correct?
a. Screening is the process of finding the best among available acceptable alternatives.
b. Ranking is the process of determining whether an investment meets a minimum standard of financial acceptability.
c. For the comparison of cash flows to be accurate, all amounts should be stated at their value at the point in time when the cash flow occurs.
d. Cash received sooner is worth more than cash received later.
e. Generally speaking, managers use relatively low discount rates when evaluating investments that involve a high degree of risk.