A Capital Budgeting Tool That Management Can Use to Summarize

question 143

Multiple Choice

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

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

---

Definitions:

Perpetrate A Fraud

The act of intentionally deceiving someone or a group in order to gain an unfair or illegal advantage, often financial.

Personally Liable

A legal term referring to an individual's responsibility to settle a debt or legal judgment from their personal assets.

Corporate Bonds

Debt securities issued by corporations to finance their operations, which typically pay periodic interest payments and return the principal at maturity.

Common Stock

A security that evidences ownership in a corporation. A share of common stock gives the owner a proportionate interest in the corporation with regard to control, earnings, and net assets. Common stock is lowest in priority with respect to payment of dividends and distribution of the corporation’s assets on dissolution.