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The ideal decision-making criteria should: Incorproate the requred rate of return on the project. Subject to...

The ideal decision-making criteria should:

Incorproate the requred rate of return on the project.

Subject to the management cut-off to payoff financing.

Include all cash flows occur during the life of the project.

Consider the time value of money.

How many of the above statements are true?

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Answer #1

The ideal decision-making criteria (for the capital budgeting process) should include the following:
Incorporate the required rate of return on the project. This means incorporating the risk associated with the project.
Include all cash flows occur during the life of the project. This means including the cash inflows and outflows over the life of the project.  
Consider the time value of money (that includes the cash flow timings of a project or investment)

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