Which One of the Following Methods Considers the Time Value

question 153

Multiple Choice

Which one of the following methods considers the time value of money in evaluating alternative capital expenditures?

• A) Accounting rate of return.
• B) Net present value.
• C) Payback period.
• D) Cash flow method.
• E) Return on average investment.

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Definitions:

Parol Evidence Rule

A legal principle that prohibits the use of oral evidence to contradict or modify the terms of a written contract.

Condition Precedent

A condition in a contract that must be met before a party's obligation or right becomes effective.

Contract

A legally binding agreement between two or more parties that outlines the terms and conditions for the exchange of goods, services, or other forms of consideration.

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing and duly signed by all parties involved, to be enforceable.