Which of the Following Is a Capital Budgeting Method

question 40

Multiple Choice

Which of the following is a capital budgeting method?

• A) return on assets
• B) net present value
• C) inventory turnover
• D) return on equity

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Definitions:

Consolidation

The process of combining the financial statements of a parent company and its subsidiaries into one comprehensive financial statement.

Goodwill

A non-physical asset that occurs when a business purchases another business at a cost exceeding the fair market value of its identifiable net assets.

Business Combination

A transaction or other event in which an acquirer obtains control of one or more businesses, which can be achieved through acquisitions, mergers, or consolidations.

Consolidate

In financial context, to combine assets, liabilities, and other financial items of two or more entities into one.