NPV Is Superior to Average Accounting Return as a Capital

question 68

Multiple Choice

NPV is superior to average accounting return as a capital budgeting technique because:

• A) it employs the accounting definition of income.
• B) it values each cash flow equally based on dollar value.
• C) it employs the actual cost of an investment.
• D) it employs cash flows.

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Definitions:

Progressive Party

A political party in the United States that advocated for reform and progressive policies, notably active in the early 20th century.

American Freedom

The set of values, principles, and practices that define the liberties and rights pursued and protected in the United States, including freedom of speech, religion, and the pursuit of happiness.

Alger Hiss

A former U.S. government official who was accused of being a Soviet spy in 1948 and convicted of perjury in connection with this charge.

Julius Rosenberg

An American who, along with his wife Ethel, was convicted of espionage for the Soviet Union and executed in 1953, in a case that remains controversial.