A Capital Budgeting Tool That Management Can Use to Summarise

question 98

Multiple Choice

A capital budgeting tool that management can use to summarise the difference in the future net cash inflows from an intangible asset at two different points in time is referred to as:

• A)the net present value method.
• B)the payback method.
• C)the accrual accounting rate-of-return method.
• D)sensitivity analysis.

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Definitions:

Self-Sufficient

The ability of an individual, household, or nation to meet all their needs without external assistance or trade.

Standard of Living

A measure of the wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Importing

The process of importing products or services from other countries for the purpose of selling them domestically.

High-Opportunity Cost

A situation where choosing one option results in the loss of the potential gain from other alternatives.