Answer:
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.
