The Following Are Measures Used by Firms When Making Capital

question 41

Multiple Choice

The following are measures used by firms when making capital budgeting decisions except:

• A) Payback period
• B) Internal rate of return
• C) P/E ratio
• D) Net present value

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Definitions:

Expected-Rate-Of-Return

The anticipated percentage of gain or loss an investment is projected to generate, considering the risks involved.

Connecting Points

In the context of networks or transportation, refers to nodes or locations that link various segments or paths, facilitating movement or communication.

Loans

Financial agreements where money is lent to another party in exchange for future repayment of the principal amount along with interest or other finance charges.

Retained Earnings

The portion of a company's profits that is kept or retained within the company to be used for business growth or debt repayment, rather than being distributed to shareholders as dividends.