Which of the Following Methods Uses Income Instead of Cash

question 7

Multiple Choice

Which of the following methods uses income instead of cash flows?

• A)payback
• B)accounting rate of return
• C)internal rate of return
• D)net present value

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Definitions:

Pretax Basis

Financial calculations or comparisons made before deducting income tax expenses, providing a raw snapshot of performance or position.

Direct Effects

Immediate impacts or outcomes resulting from a specific action or event.

Incremental Changes

Minor adjustments or improvements made to a product, process, or system over time.

Net Cash Outlays

Net cash outlays is a term used to describe the total cash expenditures a company makes, minus any cash inflows.