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29 May, 19:39

ignoring differences in the useful lives of investments when evaluating capital expenditure alternatives can distort present value analysis.

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  1. 29 May, 19:56
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    Yes, it does.

    Explanation:

    It definitely impacts the present value analysis. If we are evaluating two proposals and we ignore the useful lives of the investments, then

    The present values of the investment proposals will be inaccurate. The cash flows might be inaccurate. The discount factor to be used will also be inaccurate. The overall results will be misleading. The tax credits and balancing allowances and charges will also be inaccurate.
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