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:

UCC

The Uniform Commercial Code; a comprehensive set of laws governing all commercial transactions in the United States, intended to standardize the law across the states.

Physical Delivery

Refers to the actual transfer of the underlying asset rather than a cash settlement in futures and options trading.

Sale On Approval

A conditional sale that is to become final only in case the buyer, after a trial, approves or is satisfied with the article sold.

Risk Of Loss

The responsibility for the financial impact of damage, destruction, or disappearance of goods or property, assigned by law or by contract.