Net Present Value

question 115

Multiple Choice

Net present value:

• A)is the best method of analyzing mutually exclusive projects.
• B)is less useful than the internal rate of return when comparing different sized projects.
• C)is the easiest method of evaluation for non-financial managers to use.
• D)is less useful than the profitability index when comparing mutually exclusive projects.
• E)is very similar in its methodology to the average accounting return.

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Definitions:

Ledger

A book or collection of accounts in which account transactions are recorded and categorized to show changes in financial positions.

Total Debits

In accounting, this refers to the total sum of all debit entries recorded in all accounts for a given period.

Total Credits

The sum of all credit entries recorded in the accounting books of a business, reflecting the total value of transactions decreasing assets or increasing liabilities and equity.

Beginning Balance

The sum of funds in an account at the beginning of a new accounting cycle, transferred from the conclusion of the last period.