In Capital Budgeting Computations, Discounted Cash Flow Methods

question 69

Multiple Choice

In capital budgeting computations, discounted cash flow methods:

• A)automatically provide for recovery of initial investment.
• B)can't be used unless cash flows are uniform from year to year.
• C)assume that all cash flows occur at the beginning of a period.
• D)ignore all cash flows after the payback period.

---

Definitions:

DuPont Formula

An expanded expression of return on investment determined by multiplying the profit margin by the investment turnover.

Financial Information

Refers to data related to the financial performance and position of a business or individual, including details on income, expenses, assets, and liabilities.

Nonfinancial Information

Information that is not related to money or finances, often concerning the operational or strategic aspects of a business.

Financial Information

Data relating to the monetary transactions, assets, liabilities, net worth, and operational results of an individual or an organization.