Exercise 26.1

a. The examination of differences among revenue, costs, and cash flows under alternative courses of action. b. A cost incurred in the past that cannot be changed as a result of future actions. c. The process of planning and evaluating proposals for investments in plant assets. d. The average annual net income from an investment expressed as a percentage of the average amount invested. e. The length of time necessary to recover the entire cost of an investment from resulting annual net cash flows. f. The present value of an investment's expected future cash flows. g. The amount of money today that is considered equivalent to the cash flows expected to take place in the future. h. The required rate of return used by an investor to discount future cash flows to their present value. i. Often an investment's final cash flows to be considered in discounted cash flow analysis. Exercise 26.1 a. b. c. d. e. f. g. h