Which of the Following Methods Is Not One Used by Management

question 96

Multiple Choice

Which of the following methods is not one used by management in analysing the expected results of capital budgeting decisions?

• A)Payback method
• B)Future-value cash-flow method
• C)Discounted cash-flow method
• D)Accrual accounting rate-of-return method

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Definitions:

Preferred Shares

A class of ownership in a corporation that has a higher claim on assets and earnings than common shares, usually with fixed dividends.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements and is used to evaluate the cost of funding projects via equity financing.

Dividend

A disbursement by a company to its shareholders, often from its profit reserves.

Growth Rate

The rate at which a company's earnings, revenue, or another financial metric increases over a specific period.