One of the Easiest Capital Budgeting Methods to Understand Is

question 42

Multiple Choice

One of the easiest capital budgeting methods to understand is

• A)net present value.
• B)the internal rate of return.
• C)the payback method.
• D)the strategic analysis approach.

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Definitions:

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies and to reflect this in the profit and loss statement proportionally to their ownership level.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not fully control the company, typically 20%-50% ownership.

Proportionate Share

An individual's or entity's part or share of something in relation to the whole, usually expressed as a percentage.