Generally, which of the following measurements is considered the best single criterion in capital budgeting decisions? a. WACC b. Internal rate of return c. Payback d. Net present value
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- (1) What are the three types of risk that are relevant in capital budgeting? (2) How is each of these risk types measured, and how do they relate to one another? (3) How is each type of risk used in the capital budgeting process?Which of the following methods of capital budgeting indicates the time period required to recover the investment? a. Internal rate of return b. Accounting Rate of return c. Payback period d. Net present valueWhich capital budgeting technique defines returns in terms of income instead of cash flows? a) The payback period b) The internal rate of return technique c) The net present value technique d) The unadjusted rate of return method
- Which of the following is the most reliable method for making capital budgeting decisions? a. ARR method b. Post-audit method c. NPV method d. Payback methodWhich capital budgeting technique measures all expected future cash inflows and outflows as if they occurred at a single point in time? Group of answer choices a. sensitivity analysis b. accrual accounting rate-of-return method c. net present value method d. payback methodOne of the modern methods of Capital Budgeting is: O a. Profitability index O b. Accounting Rate of Return O c. Payback period d. None of these
- Define each of the following terms:a. Capital budgeting; payback period; discounted payback periodQuestion: Which of the following methods of capital budgeting accounts for the time value of money? Options: A) Net Present Value (NPV) B) Payback Period C) Accounting Rate of Return (ARR) D) Profitability Index (PI)The following are discounting techniques in capital budgeting, except? discounted payback accounting rate of return present value index modified internal rate of return
- Which of the following are present value methods of analyzing capital investment proposals? a. internal rate of return and average rate of return b. average rate of return and net present value c. net present value and cash payback d. net present value and internal rate of returnWhat is meant by the term payback period? How is this criterion sometimes used in capital budgeting?