The Method That Compares the Present Value of a Project's

question 15

Multiple Choice

The method that compares the present value of a project's future cash flows to the initial investment is:

• A)accounting rate of return.
• B)payback period.
• C)net present value.
• D)internal rate of return.

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Definitions:

Non-Cash Items

Expenses or incomes on a company’s financial statements that do not involve actual cash flow, such as depreciation or amortization.

Operating Cash Flow

The cash generated from the normal operations of a business, reflecting how well the company generates cash to pay its debt obligations and fund its operating expenses.

Sales Revenues

The income received by a company from its sales of goods or the provision of services.

Capital Cost Allowance

Capital cost allowance is a tax deduction available in Canada for depreciable property, allowing businesses to write off the cost of assets over a period of time.