Which of the Following Is a Capital Budgeting Technique That

question 3

Multiple Choice

Which of the following is a capital budgeting technique that converts a project's cash flows using a more consistent reinvestment rate prior to applying the Internal Rate of Return, IRR, decision rule?

• A)Discounted payback
• B)Net present value
• C)Modified internal rate of return
• D)Profitability index

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Definitions:

Common Dividends

Payments made by a corporation to its common shareholders from its after-tax profits.

Professional Judgement

Professional Judgement involves applying expertise, knowledge, and experience to make informed decisions and assessments in the context of accounting and auditing.

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur, providing a more accurate picture of a company's financial health.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio or a company's product line to minimize risks.