Which Method of Evaluating Capital Investment Proposals Uses Present Value

question 173

Multiple Choice

Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows expected from capital investment proposals?

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

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Definitions:

Discrete Random Variable

A variable that can only take on a finite or countably infinite set of distinct values, often representing counts or categories.

Standard Deviations

The measure of the dispersion or spread of data points in a data set from its mean, reflecting how much variation there is from the average.

Data Set

A collection of related sets of information that is composed of separate elements but can be manipulated as a unit by a computer.

CAT Mnemonic

A memory aid used to recall specific information, but without more context, the exact application of "CAT" cannot be determined.