Question Content Area Which of the following is a method of analyzing capital investment proposals that ignores present value? a. average rate of return b. net present value c. discounted cash flow d. internal rate of return

Question Content Area Which of the following is a method of analyzing capital investment proposals that ignores present value? a. average rate of return b. net present value c. discounted cash flow d. internal rate of return

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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Question

Question Content Area

Which of the following is a method of analyzing capital investment proposals that ignores present value?

a. average rate of return

b. net present value

c. discounted cash flow

d. internal rate of return

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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