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Which of the following would NOT change a project's present worth?

  • A.the amount already spent on preliminary studies
  • B.the discount rate applied
  • C.the estimated salvage value
  • D.the timing of the annual receipts

Answer: A

Preliminary spending is sunk and is the same whichever course is now taken, so it cannot discriminate between the alternatives at all. Rate, salvage value and the timing of receipts each genuinely alter the discounted figure.

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