{"id":43266,"date":"2024-04-15T21:27:00","date_gmt":"2024-04-15T21:27:00","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=43266"},"modified":"2024-04-15T21:27:00","modified_gmt":"2024-04-15T21:27:00","slug":"in-cash-flow-analysis-two-projects-are-compared-by-using-common-life-is-classified-as","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-cash-flow-analysis-two-projects-are-compared-by-using-common-life-is-classified-as\/","title":{"rendered":"In cash flow analysis, two projects are compared by using common life is classified as"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;transaction approach&#8221; option2=&#8221;replacement chain approach&#8221; option3=&#8221;common life approach&#8221; option4=&#8221;Both B and C&#8221; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is C. common life approach.<\/p>\n<p>The common life approach is a method of comparing two or more projects with different lives by finding the longest common life of the projects. The cash flows of the projects are then discounted over the common life to find the present value of each project. The project with the higher present value is the preferred project.<\/p>\n<p>The transaction approach is a method of comparing two or more projects by considering the cash flows of each project over its entire life. The cash flows of each project are then discounted to find the present value of each project. The project with the higher present value is the preferred project.<\/p>\n<p>The replacement chain approach is a method of comparing two or more projects by considering the cash flows of each project over its entire life, as well as the cash flows of the replacement projects that will be needed after the initial project has been completed. The cash flows of each project and its replacement projects are then discounted to find the present value of each project. The project with the higher present value is the preferred project.<\/p>\n<p>In conclusion, the common life approach is a method of comparing two or more projects with different lives by finding the longest common life of the projects. The cash flows of the projects are then discounted over the common life to find the present value of each project. The project with the higher present value is the preferred project.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;transaction approach&#8221; option2=&#8221;replacement chain approach&#8221; option3=&#8221;common life approach&#8221; option4=&#8221;Both B and C&#8221; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-43266","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>In cash flow analysis, two projects are compared by using common life is classified as<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/in-cash-flow-analysis-two-projects-are-compared-by-using-common-life-is-classified-as\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"In cash flow analysis, two projects are compared by using common life is classified as\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;transaction approach&#8221; 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