The Two Methods That Use Present Value to Analyse Capital

question 15

Multiple Choice

The two methods that use present value to analyse capital investment proposals are net present value and .

• A)internal rate of return
• B)average rate of return
• C)external rate of return
• D)cash payback

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Definitions:

Expected Frequency

The forecasted count of occurrences in a category of a distribution, based on a probability model.

True Null Hypothesis

The proposition that there is truly no effect or difference, as opposed to the hypothesis being tested, which suggests that there might be.

Level of Risk

Indicates the potential for loss or harm which can result from a given action, activity, or decision.

Type I Error

The probability of rejecting a null hypothesis when it is true.