When Evaluating Different Capital Budgeting Techniques Such as Payback,net Present

question 23

Multiple Choice

When evaluating different capital budgeting techniques such as payback,net present value,internal rate of return,profitability index and accounting rate of return,

• A) all techniques are equal and there is no reason to prefer one technique over another.
• B) some techniques have advantages over others.
• C) corporate managers have "stuck with" the same techniques over the last thirty years.
• D) both (a)and (b)
• E) all of the above

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Definitions:

Drop-in-the-bucket Problem

A metaphorical expression indicating a situation where the effort or resources are too insignificant to make a noticeable difference in a larger context.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be consumed by everyone and one person's use doesn't reduce availability to others.

Common Resource

A resource like air or water that offers users tangible benefits but is difficult to exclude non-payers from using, often leading to overuse.

Common Resource

A type of good that is non-excludable and rivalrous, such as air or a fishing area, leading to potential overuse or depletion.