The duration of time within which theinvestment made for the project will berecovered by the net returns of the project isknown asа.Accounting rate of return methodb.Payback periodС.Net present value methodd.Period of returnCapital budgeting is the process of evaluatingand selecting short-term investments that areconsistent with the firm's goal of maximizingowners' wealth.Select one:TrueFalse

Payback Period:-It is a period required to cover up the cost of investment. In simple words, it is a…

The duration of time within which the investment made for the project will be recovered by the net returns of the project is known as а. Accounting rate of return method b. Payback period C. Net present value method d. Period of return Capital budgeting is the process of evaluating and selecting short-term investments that are consistent with the firm's goal of maximizing owners' wealth. Select one: True False

The duration of time within which the investment made for the project will be recovered by the net returns of the project is known as а. Accounting rate of return method b. Payback period C. Net present value method d. Period of return Capital budgeting is the process of evaluating and selecting short-term investments that are consistent with the firm's goal of maximizing owners' wealth. Select one: True False

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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Similar questions

Which of the following characteristics would an investor place a greater priority on for a short-term investment than for a long-term investment? Tax considerations Liquidity of the investment How often the investment rate compounds Length of the investment period
A. What does each of the following definitions refer to: 1. The comparison of the expected future streams of earnings from a project, with the immediate and subsequent streams of expenditure. 2. All aspects of the administration of cash, accounts receivables, inventory, accounts payable, short term debt, accrued expenses, etc. 3. The specific mixture of long-term debt and equity the firm uses to finance its operations.
. What does each of the following definitions refer to: The comparison of the expected future streams of earnings from a project, with the immediate and subsequent streams of expenditure. All aspects of the administration of cash, accounts receivables, inventory, accounts payable, short term debt, accrued expenses, etc. The specific mixture of long-term debt and equity the firm uses to finance its operations.
Short term investment decisions are also called as Select one: O a. Liquidity decision b. Finance Decision c. None d. Capital Budgeting decisions
Suppose an investment has conventional cash flows with positive NPV. how would it impact your decision based on capital budgeting techniques mentioned below? 1.profitability index 2.internal rate of return 3.payback period
In calculating the incremental after-tax cash flows associated with a particular investment, the firm must consider many types of cash flows. Select all the incremental cash flow types below that the firm would not incorporate directly into their incremental after-tax cash flow estimates. A) revenues B) operating costs C) sunk costs D) net working captial E) opportunity costs F) financing costs
Which of the following best describes the process of capital budgeting? a Forecasting revenues and expenses hmiting funds for capital improvements without considering the profitability of proposed prot determining a companys short term goals d. determinung the amount to spend on fixed assets and which fixed assets to purchase
Select all of the following that managers can use to evaluate capital invesments. (Select all that apply.) High-Low Method Net present value method LIFO Method Internal rate of return method FIFO Method Annual rate of return Cash payback technique Depreciation method
iw) What does it mean for projects to be mutually exclusive? How should managers rank mutually exclusive projects? B. What are the strength and weaknesses of each of the following capital budgeting technique below? i. Payback i. ARR i. Profitability Index iv. IRR
1. Define capital expenditures and provide examples of capital expenditures.2. Cash flows for a particular project should be measured on an incremental basis. What does that mean?3. How does the opportunity cost concept affect capital budgeting cash flow determination?4. What factors should be considered when estimating a new business’ NINV? Is it any different for an asset replacement project. 5. Why is depreciation, a noncash expense, considered when estimating a project’s net cash flows?6. What are the potential tax consequences of selling an old asset in an asset replacement investment decision?
Capital Budgeting is acquiring inputs with long term returns. Which of the following author gave the above definition? a. Charles Richard b. Lyrich c. Charles T.Hrongreen d. Richard Green Law
What does the term "Net Present Value (NPV)" represent in finance? a) The total revenue generated by an investment b) The difference between the present value of cash inflows and the present value of cash outflows c) The total cost of an investment project d) The total profit earned from an investment