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:

Independent Variables

Variables in an experiment that are manipulated to observe their effects on dependent variables.

Experimental Hypothesis

An assumption or prediction about the relationship between two variables or the outcome of an experiment designed to be tested through research.

Control Conditions

Conditions in an experiment that are kept constant to accurately test the impact of the experimental factor.

Experimental Procedures

Systematic processes undertaken to discover new knowledge or to test hypotheses by manipulating variables and observing the outcomes.