Which Capital Budgeting Method Is Most Useful for Evaluating the Following

question 54

Multiple Choice

Which capital budgeting method is most useful for evaluating the following project? The project has an initial after tax cost of $5,000,000 and it 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) NPV.
• B) IRR.
• C) Payback.
• D) Two of the above.

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Definitions:

Plan B

A backup plan or alternative strategy in case the original plan fails or circumstances change.

Social Influence

The effect of other people's actions, perceptions, or behavior on an individual's attitudes, beliefs, or actions.

Majority And Minority

Terms related to the larger part of a group (majority) and the smaller part or subgroups within it (minority), often discussed in the context of social dynamics and power structures.

Social Impact

The influence or effect of an individual or group on others, often measured by changes in behaviors, attitudes, or social structures.