Which of the Following Methods of Evaluating Capital Investment Projects

question 14

Multiple Choice

Which of the following methods of evaluating capital investment projects incorporates the time value of money concept?

• A)Payback period, discounted payback period, and net present value (NPV)only
• B)Discounted payback period, net present value (NPV), and internal rate of return only
• C)Net present value (NPV)and internal rate of return only
• D)Payback period, discounted payback period, net present value (NPV), and internal rate of return

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Definitions:

Supplies Expense

Costs associated with the consumption of supplies necessary for the daily operations of a business, recognized as an expense in the accounting period in which they are used.

Inventory

The entire inventory of products and materials maintained by a business for selling or manufacturing purposes.

Rent Expense

The cost incurred for using property or equipment under a lease agreement.

Prepaid Rent

Payments made in advance for rent, which is recorded as an asset initially and then expensed over the period the payment covers.