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A corporate CFO who wants to support a proposed capital project will

a.

calculate NPV using any or all of the above

b.

calculate NPV assuming growing market​ share/aggregate demand

c.

calculate NPV assuming improving efficiency in production

d.

calculate NPV assuming a stable regulatory environment

1 Answer

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Final answer:

A corporate CFO will calculate NPV to support a proposed capital project, considering factors like growing market share, improving efficiency, and a stable regulatory environment.

Step-by-step explanation:

A corporate CFO who wants to support a proposed capital project will calculate NPV using any or all of the options listed.

A financial indicator called net present value (NPV) is used to compare the present value of cash inflows and outflows and assess how profitable an investment is. The CFO will assess the project's profitability by discounting the expected future cash flows back to the present and comparing it to the initial investment.

Factors like growing market share, improving efficiency in production, and a stable regulatory environment can be considered while calculating the NPV to account for potential changes in revenues or costs over the project's lifetime.

User Sarada Akurathi
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