Which Method of Evaluating Capital Investment Proposals Uses the Concept

question 44

Multiple Choice

Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return?

• A) average rate of return
• B) accounting rate of return
• C) cash payback period
• D) internal rate of return

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Definitions:

Pretax Income

Income of a company before taxes are deducted; also known as earnings before tax.