Matching
Match of the following.
Premises:
A capital budgeting technique that identifies the time period required to recover the cost of a capital investment from the annual cash inflow produced by the investment.
The minimum rate of return management requires on an investment.
A cost that cannot be changed by any present or future decision.
The potential benefit that may be lost from following an alternative course of action.
The determination of the profitability of a capital expenditure by dividing expected annual net income by the average investment.
A method used in capital budgeting in which cash inflows are discounted to their present value and then compared to the capital outlay required by the capital investment.
A capital budgeting technique that considers both the estimated total cash inflows from the investment and the time value of money.
A method used in capital budgeting that results in finding the interest yield of the potential investment.
The process of identifying the financial data that change under alternative courses of action.
The process of making capital expenditure decisions in business.
Responses:
Net present value method
Sunk cost
Internal rate of return method
Discounted cash flow technique
Annual rate of return technique
Cash payback technique
Incremental analysis
Opportunity cost
Capital budgeting
Hurdle or cutoff rate
Correct Answer:
Premises:
Responses:
A capital budgeting technique that identifies the time period required to recover the cost of a capital investment from the annual cash inflow produced by the investment.
The minimum rate of return management requires on an investment.
A cost that cannot be changed by any present or future decision.
The potential benefit that may be lost from following an alternative course of action.
The determination of the profitability of a capital expenditure by dividing expected annual net income by the average investment.
A method used in capital budgeting in which cash inflows are discounted to their present value and then compared to the capital outlay required by the capital investment.
A capital budgeting technique that considers both the estimated total cash inflows from the investment and the time value of money.
A method used in capital budgeting that results in finding the interest yield of the potential investment.
The process of identifying the financial data that change under alternative courses of action.
The process of making capital expenditure decisions in business.
Premises:
A capital budgeting technique that identifies the time period required to recover the cost of a capital investment from the annual cash inflow produced by the investment.
The minimum rate of return management requires on an investment.
A cost that cannot be changed by any present or future decision.
The potential benefit that may be lost from following an alternative course of action.
The determination of the profitability of a capital expenditure by dividing expected annual net income by the average investment.
A method used in capital budgeting in which cash inflows are discounted to their present value and then compared to the capital outlay required by the capital investment.
A capital budgeting technique that considers both the estimated total cash inflows from the investment and the time value of money.
A method used in capital budgeting that results in finding the interest yield of the potential investment.
The process of identifying the financial data that change under alternative courses of action.
The process of making capital expenditure decisions in business.
Responses:
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