Which of the Following Is a Technique for Evaluating Capital

question 63

Multiple Choice

Which of the following is a technique for evaluating capital projects that tells how long it will take a firm to earn back the money invested in a project?

• A) Payback
• B) Internal rate of return
• C) Net present value
• D) Profitability index

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Definitions:

Substitutes

Goods or services that can be used in place of each other, where the increase in price of one leads to an increase in demand for the other.

Imperfectly Competitive

Describes markets where individual sellers have some control over the price of their goods or services, as opposed to perfect competition where none exists.

Price Makers

Firms or entities that have the ability to influence the price of goods or services in the market due to their size, uniqueness of product, or market power.

Imperfectly Competitive

A market structure where the conditions necessary for perfect competition are not satisfied, often due to products being differentiated or barriers to entry existing.