Which Method for Evaluating Capital Investment Proposals Reduces the Expected

question 71

Multiple Choice

Which method for evaluating capital investment proposals reduces the expected future net cash flows originating from the proposals to their present values and computes a net present value?

• A) Net present value
• B) Average rate of return
• C) Internal rate of return
• D) Cash payback

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Definitions:

Hermann Rorschach

Swiss psychiatrist and psychoanalyst known for developing the Rorschach inkblot test, a projective psychological test.

Projective Test

A type of personality test designed to let a person respond to ambiguous stimuli, potentially revealing hidden emotions and internal conflicts.

Self-actualization

The process of realizing or achieving personal gifts and potential, thought of as a basic push or necessity found in every human being.

Open

Susceptible to new experiences, ideas, or suggestions without immediate judgment or resistance.