The Following Capital Budgeting Technique(s)measure All Expected Future Cash Inflows

question 88

Multiple Choice

The following capital budgeting technique(s) measure all expected future cash inflows and outflows as if they occurred at a single point in time:

• A)internal rate-of-return
• B)net present value
• C)payback
• D)Both A and B are correct.

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Definitions:

Variable Cost

Costs that change in proportion to the level of production output or activity level of an entity.

Average Variable Costs

Average variable costs represent the per-unit variable costs of production, calculated by dividing total variable costs by the quantity of output.

Average Fixed Costs

Average fixed costs refer to the fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, which decreases as output increases.

Total Cost

The entire production cost, comprising both unchanging and variable expenditures.