Which of the Following Investment Rules Does Not Use the Time

question 7

Multiple Choice

Which of the following investment rules does not use the time value of money concept?

• A)Net present value
• B)Internal rate of return
• C)The payback period
• D)Profitability index

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Definitions:

Operating Financing

Refers to the process of planning and managing the day-to-day financial operations of a company, including sourcing and utilizing funds.

Investing Activities

Financial activities related to the acquisition or disposal of long-term assets and investments not included in cash equivalents.

Statement of Cash Flows

An accounting report detailing the impact of variations in balance sheet accounts and earnings on cash and cash equivalents, categorizing the analysis among operating, investing, and financing activities.

Nonoperating Activities

Various revenues, expenses, gains, and losses that are unrelated to a company’s main line of operations.