Which Methods of Evaluating a Capital Investment Project Use Cash

question 103

Multiple Choice

Which methods of evaluating a capital investment project use cash flows as a measurement basis?

• A)Net present value,accounting rate of return,and internal rate of return.
• B)Internal rate of return,payback period,and accounting rate of return.
• C)Accounting rate of return,net present value,and payback period.
• D)Payback period,internal rate of return,and net present value.
• E)Net present value,payback period,accounting rate of return,and internal rate of return.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year's time, including cash, inventory, and receivables.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Ratios

A quantitative relationship between two numbers, showing how many times one value contains or is contained within the other.