Which Capital Investment Evaluation Technique Is Described by the Following

question 286

Multiple Choice

Which capital investment evaluation technique is described by the following characteristics? (1) Closely related to NPV; (2) Easy to understand and communicate; (3) May lead to incorrect decisions when comparing mutually exclusive investments; (4) May be useful when the available investment funds are limited.

• A) NPV
• B) IRR
• C) AAR
• D) Payback period
• E) PI

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Definitions:

First-Line Managers

Managers at the lowest level of an organization who directly supervise and support the work of non-managerial employees.

Organizing Process

The method of arranging resources and tasks to achieve an organization's goals efficiently and effectively.

Management Hierarchy

The arrangement of individuals within an organization according to power, status, and job functions, creating a structured chain of command.

Supervisors

Individuals within an organization responsible for overseeing the work of others and ensuring tasks are completed effectively.