Which of the Following Decision Rules Has the Advantage That

question 120

Multiple Choice

Which of the following decision rules has the advantage that the information needed for the calculation is readily available?

• A) Net present value
• B) Internal rate of return
• C) Average accounting return
• D) Payback period
• E) Discounted payback

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Definitions:

Collection Delay

The time period between when a cheque is deposited and when the funds are available for use.

Average Amount

The sum of a set of values divided by the number of values, often used to find a central value or typical amount in a dataset.

Debit Card

An automated teller machine card used at the point of purchase to avoid the use of cash. As this is not a credit card, money must be available in the user’s bank account.

Automated Teller Machine Card

A plastic card linked to a bank account, used at ATMs for transactions such as cash withdrawals, deposits, and balance checks.