Solved

Match the Letter of the Term with the Definition

Question 161

Matching

Match the letter of the term with the definition.Use the space provided preceding each definition.

Premises:
Capital budgeting
Hurdle rate
Net present value
Internal rate of return
Payback period
Accounting rate of return
Net cash flow
Responses:
Cash inflows minus cash outflows for the period.
Initial cost of an investment subtracted from discounted future cash flows from the investment.
Annual after-tax net income divided by annual average investment.
The required rate of return.
The time expected to pass before the net cash flows from an investment equals its initial cost.
Equals the discount rate that results in a net present value of zero.
A process of analyzing alternative long-term investments and deciding which assets to acquire or sell.

Correct Answer:

Capital budgeting
Hurdle rate
Net present value
Internal rate of return
Payback period
Accounting rate of return
Net cash flow
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