Which Capital Budgeting Method Is Most Useful for Evaluating a Project

question 113

Multiple Choice

Which capital budgeting method is most useful for evaluating a project that has an initial after-tax cost of $5,000,000 and is expected to provide after-tax operating cash flows of $1,800,000 in year 1, ($2,900,000) in year 2, $2,700,000 in year 3, and $2,300,000 in year 4?

• A) net present value
• B) internal rate of return
• C) payback
• D) accounting rate of return

Identify ethical dilemmas and appropriate decision-making processes in social work practice.

Recognize the importance of qualifications, ability, and skill in effective social work practice.

Understand the ethical guidelines regarding professional behavior and interpersonal relationships within the workplace.

Learn the ethical considerations necessary in protecting client welfare and maintaining professional integrity.

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Minimum Required Rate

The lowest rate of return or discount rate that investors are willing to accept before investing in a project or financial asset.

Investment Opportunity

Any vehicle or asset that individuals or businesses can put money into in hopes of generating a financial return.

Return On Investment

A financial ratio used to evaluate the effectiveness of an investment, comparing the gain from the investment to its cost.