Which of the Following Is a Capital Budgeting Method That

question 104

Multiple Choice

Which of the following is a capital budgeting method that ignores the time value of money?

• A) payback
• B) internal rate of return
• C) return on assets
• D) net present value

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Definitions:

Insurance Companies

Businesses that provide coverage, in the form of compensation resulting from loss, damages, injury, treatment or hardship in exchange for premium payments.

Coinsurance Clause

A provision in an insurance policy that requires the policyholder to bear a portion of the risk by paying a percentage of the total claim.

Fair Market Value

The price at which property would exchange hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell.

Covered Peril

Risks or events that are specifically included as covered within an insurance policy, providing protection against losses from those events.