Which of the Following Decision Rules Might Best Be Used

question 50

Multiple Choice

Which of the following decision rules might best be used as a supplement to net present value (NPV) by a firm that favours liquidity?

• A)payback period
• B)equivalent annual annuity
• C)MIRR
• D)profitability index

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Definitions:

Risk of Loss

Refers to the possibility that an asset's value could decrease due to a variety of factors, potentially resulting in financial loss for the holder.

Title

The legal right to own, use, or dispose of property; often evidenced by a document.

Insurable Interest

(1) In contract law, a property interest in goods being sold or leased that is sufficiently substantial to permit a party to insure against damage to the goods. (2) In the context of insurance, an interest in a person’s life or well-being that is sufficiently substantial that insuring against the person’s death or injury does not amount to a mere wagering contract.

Title

The legal right to own, use, or dispose of property or assets.