A Capital Budgeting Method That Takes into Consideration the Time

question 60

Multiple Choice

A capital budgeting method that takes into consideration the time value of money is the

• A) annual rate of return method.
• B) return on stockholders' equity method.
• C) cash payback technique.
• D) internal rate of return method.

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Definitions:

Paid-in Capital

The amount of money that a company has received from shareholders in exchange for shares of stock.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.

Stockholders' Equity

Represents the residual interest in the assets of an entity after deducting liabilities, essentially the net worth attributable to shareholders.