All of the Following Capital Budgeting Tools Are Suitable for Non-Normal

question 24

Multiple Choice

All of the following capital budgeting tools are suitable for non-normal cash flows except ____.

• A) MIRR
• B) Profitability Index
• C) Payback
• D) NPV

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Definitions:

Main Purpose Rule

A legal principle that exempts a guarantor from the requirement of a written contract if the primary intent of the guarantee is to serve the guarantor's own interests.

Debtor

An individual or entity that owes money to another party.

Foreclosure Proceeding

A legal process by which a lender seeks to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan.

Redeem

To recover possession of something by paying a specified amount, or to fulfill a promise or obligation.