The Finding from Surveys of the Methods of Business Investments

question 66

Multiple Choice

The finding from surveys of the methods of business investments that is true is:

• A)businesses generally only use one method to assess each investment decision.
• B)there is a tendency for larger businesses to use the discounting methods.
• C)the payback method is hardly used in practice.
• D)All of the statements are true.

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Definitions:

Depreciation Expense

A non-cash expense that reduces the value of tangible assets over their useful life due to wear and tear or obsolescence.

Indirect Method

A method for preparing the cash flow statement, where net income is adjusted for non-cash transactions and changes in working capital.

Net Income

The net income of a business once all costs and taxes are subtracted from its total revenue.

Trading Purposes

Activities conducted with the objective of profiting from short-term fluctuations in market prices.