The Method That Measures the Time It Will Take to Recoup

question 69

Multiple Choice

The method that measures the time it will take to recoup, in the form of future cash inflows, the total dollars invested in a project is called:

• A)the accrued accounting rate-of-return method
• B)payback method
• C)internal rate-of-return method
• D)the book-value method

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Definitions:

Accrued Salaries

Salaries that have been earned but not yet paid out to employees.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Accounts Receivable

Funds that customers have yet to pay to a business for the goods or services that have already been provided to them.

Accumulated Depreciation

The total depreciation of an asset up to a single point in time, reflecting its decreased value from wear and tear or obsolescence.