If a Manager Was Concerned with the Time Value of Money

question 66

Multiple Choice

If a manager was concerned with the time value of money, from which two capital budgeting methods should the manager choose?

• A) IRR or Payback.
• B) BET or IRR.
• C) BET or Payback.
• D) NPV or ARR.
• E) NPV or Payback.

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Definitions:

Price Elasticity

The calculation of how price alterations affect the demand level of a good.

Excise Tax

A specific type of tax levied on particular goods, services, or transactions, often included in the price of items such as gasoline, alcohol, and tobacco.

Taxable Income

The portion of an individual's or a corporation's income that is subject to taxes according to governmental regulations.

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income, indicating the percentage of any additional income that will be paid in taxes.