For a capital investment project to be acceptable, it must generate a rate of return A) Less than the required rate of return B) Equal to or greater than the cost of capital C) equal to the initial investment D) none of the above

For a capital investment project to be acceptable, it must generate a rate of return A) Less than the required rate of return B) Equal to or greater than the cost of capital C) equal to the initial investment D) none of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

For a capital investment project to be acceptable, it must generate a rate of return
A) Less than the required rate of return
B) Equal to or greater than the cost of capital
C) equal to the initial investment
D) none of the above

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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