Which of the following is TRUE regarding capital rationing decisions for capital assets?
A) Companies should always choose the investment with the shortest payback period.
B) Companies should always choose the investment with the highest net present value.
C) Companies should always choose the investment with the highest rate of return.
D) Companies should consider several different methods of evaluation before choosing an investment.
Correct Answer:
Verified
Q27: Capital budgeting is:
A) planning how to invest
Q28: The payback method and the rate of
Q29: Which capital budgeting method uses accrual accounting,
Q30: Which of the following methods ignores the
Q31: Simms Manufacturing is considering two alternative
Q33: Neither the payback period nor the rate
Q34: The rate of return method and the
Q35: A criticism of the rate of return
Q35: The payback method uses discounted cash flows
Q36: The payback method ignores cash flows after
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