Question
Boeing is evaluating a new regional jet. If it proceeds with development, the firm will have to invest $200 million next year in R&D. The
Boeing is evaluating a new regional jet. If it proceeds with development, the firm will have to invest $200 million next year in R&D. The cash is currently invested in short-term securities yielding 2%. An accounting executive argues that the project should be charged for lost interest, amounting to $4 million per year ($200 million 0.02). Is he right?
A. Yes
B. No
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
14th Edition
0357516664, 978-0357516669
