An Assessment Method Widely Used in Practice Which Enables Managers

question 50

Multiple Choice

An assessment method widely used in practice which enables managers to screen investment projects to determine which projects can recoup their investment outlay the fastest is the:

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

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Definitions:

Sale of Equipment

The process of selling off business equipment, often recognized as a financial transaction that can result in a gain or loss in accounting records.

Direct Method

A cash flow statement reporting approach that presents major classes of gross cash receipts and payments, providing a clearer view of cash flows from operating activities.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.