Which of the Following Statement Is True

question 91

Multiple Choice

Which of the following statement is true?

• A)One must know the discount rate to compute the NPV of a project but one can compute
• The IRR without referring to the discount rate.
• B)One must know the discount rate to compute the IRR of a project but one can compute the
• NPV without referring to the discount rate.
• C)Payback accounts for time value of money.
• D)There will always be one IRR regardless of cash flows.
• E)Average accounting return is the ratio of total assets to total net income.

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Definitions:

MACRS Tables

The Modified Accelerated Cost Recovery System tables used in the United States for tax purposes to determine the depreciation of assets over time.

Allowable Depreciation

The allowable tax deduction for the reduction in value of a tangible asset over its useful life, as determined by tax regulations.

MACRS Tables

Depreciation schedules in the Modified Accelerated Cost Recovery System allowing for faster asset depreciation in the earlier years of the asset's life.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.