Examlex
Which of the following statements is correct?
Capital Budgeting
The process by which investors determine the value of potential investments or projects by assessing the cash inflows and outflows associated with them.
Conventional Cash Flows
A series of inward and outward cash flows over time where there is typically one initial outflow followed by several inflowing cash amounts.
Profitability Index
The Profitability Index is a financial metric that compares the present value of future cash flows generated by a project to the initial investment, used to assess the attractiveness of an investment.
Average Accounting Return
A method of measuring an investment's profitability by comparing its average net income to its average book value.
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