Matching
Match the items below
Premises:
A cost that cannot be changed by any present or future decision.
A capital budgeting technique that considers both the estimated total cash inflows from the investment and the time value of money.
A method used in capital budgeting in which cash inflows are discounted to their present value and then compared to the capital outlay required by the capital investment.
The process of identifying the financial data that change under alternative courses of action.
A method used in capital budgeting that results in finding the interest yield of the potential investment.
The minimum rate of return management requires on an investment.
The determination of the profitability of a capital expenditure by dividing expected annual net income by the average investment.
The potential benefit that may be lost from following an alternative course of action.
The process of making capital expenditure decisions in business.
A capital budgeting technique that identifies the time period required to recover the cost of a capital investment from the annual cash inflow produced by the investment.
Responses:
Incremental analysis
Opportunity cost
Discounted cash flow technique
Capital budgeting
Annual rate of return technique
Cash payback technique
Hurdle or cutoff rate
Net present value method
Sunk cost
Internal rate of return method
Correct Answer:
Premises:
Responses:
A cost that cannot be changed by any present or future decision.
A capital budgeting technique that considers both the estimated total cash inflows from the investment and the time value of money.
A method used in capital budgeting in which cash inflows are discounted to their present value and then compared to the capital outlay required by the capital investment.
The process of identifying the financial data that change under alternative courses of action.
A method used in capital budgeting that results in finding the interest yield of the potential investment.
The minimum rate of return management requires on an investment.
The determination of the profitability of a capital expenditure by dividing expected annual net income by the average investment.
The potential benefit that may be lost from following an alternative course of action.
The process of making capital expenditure decisions in business.
A capital budgeting technique that identifies the time period required to recover the cost of a capital investment from the annual cash inflow produced by the investment.
Premises:
A cost that cannot be changed by any present or future decision.
A capital budgeting technique that considers both the estimated total cash inflows from the investment and the time value of money.
A method used in capital budgeting in which cash inflows are discounted to their present value and then compared to the capital outlay required by the capital investment.
The process of identifying the financial data that change under alternative courses of action.
A method used in capital budgeting that results in finding the interest yield of the potential investment.
The minimum rate of return management requires on an investment.
The determination of the profitability of a capital expenditure by dividing expected annual net income by the average investment.
The potential benefit that may be lost from following an alternative course of action.
The process of making capital expenditure decisions in business.
A capital budgeting technique that identifies the time period required to recover the cost of a capital investment from the annual cash inflow produced by the investment.
Responses:
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