An Approach to Capital Rationing That Involves Graphing Project Returns

question 59

Multiple Choice

An approach to capital rationing that involves graphing project returns in descending order against the total dollar investment to determine the group of acceptable projects is called the

• A) net present value approach.
• B) the internal rate of return approach.
• C) the payback approach.
• D) the profitability index approach.

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Definitions:

Preference

The inclination or favoritism toward a choice or selection among various options based on subjective criteria.

Utilities

Essential services provided to the public, including water, electricity, gas, and telecommunications, often regulated by governmental bodies.

Wholesaling Functions

Activities involved in the sale of goods in large quantities for resale by retailers or other merchants, including distribution, storage, and price negotiation.

Outsourcing Functions

The practice of assigning certain business processes or tasks to external agencies or contractors instead of handling them internally.