The capital budgeting method used to find the length of time required for an investment’s discounted cash flows to equal its initial cost is called the Blank______ method. Multiple choice question. payback period discounted payback period accounting rate of return net present value

The capital budgeting method used to find the length of time required for an investment’s discounted cash flows to equal its initial cost is called the Blank______ method. Multiple choice question. payback period discounted payback period accounting rate of return net present value

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 3SEQ: The expected period of time that will elapse between the date of a capital investment and...

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Question

The capital budgeting method used to find the length of time required for an investment’s discounted cash flows to equal its initial cost is called the Blank______ method.

Multiple choice question.

payback period

discounted payback period

accounting rate of return

net present value

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

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