According to Truong, Partington, and Peat's 2004 Survey (Figure 8

question 33

Multiple Choice

According to Truong, Partington, and Peat's 2004 survey (Figure 8.2 in the text) , the most popular decision rules for capital budgeting used by CFOs of listed Australian firms are, in order

• A)NPV, IRR, MIRR.
• B)NPV, Payback, IRR.
• C)NPV, IRR, Payback.
• D)Profitability index, NPV, IRR.

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Definitions:

Lease Receivable

The amount of money owed to a lessor under the terms of a lease agreement for the use of an asset.

Direct Financing Lease

A type of lease where the lessor purchases an asset and leases it out, effectively financing its purchase for the lessee, recognizing interest income over the lease term.

Unearned Interest: Leases

Interest on a lease that has been collected in advance by the lessor but not yet earned, often requiring adjustment in accounting records.

Present Value Factors

Present value factors are used to calculate the present value of a future amount of money or stream of cash flows given a specified rate of return.