Which of the following is TRUE regarding capital rationing decisions for capital assets?
A) Companies should always choose the investment with the highest net present value.
B) Companies should consider several different methods of evaluation before choosing an investment.
C) Companies should always choose the investment with the shortest payback period.
D) Companies should always choose the investment with the highest accounting rate of return.
Correct Answer:
Verified
Q26: A criticism of the accounting rate of
Q33: Capital budgeting is:
A)evaluating the ongoing profitability of
Q35: The payback method and the accounting rate
Q35: The payback method uses discounted cash flows
Q38: The accounting rate of return calculations ignores
Q38: Which of the following methods ignores the
Q38: The payback method is a very thorough
Q39: Sullivan Company is considering the purchase of
Q92: If a company uses a higher discount
Q101: If an investment project's IRR is higher
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