Estimates Based on the Assumption That Historical Data Can Be

question 63

Multiple Choice

Estimates based on the assumption that historical data can be used as a frame of reference for current estimates are:

• A)Comparative estimates.
• B)Ballpark estimates.
• C)Definitive estimates.
• D)Feasibility estimates.

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Definitions:

Required Rate

The minimum return an investor expects to achieve by investing in a particular asset, often used in capital budgeting.

Profitability Index

A ratio that compares the present value of future cash flows generated by an investment to the investment's initial cost, indicating its relative profitability.

Required Rate Of Return

The minimum annual percentage return an investor expects to achieve from an investment.

Discounted Payback

A capital budgeting method that calculates the length of time it takes to break even from an investment based on its discounted cash flows.