Matching
Select the term from the list provided that best matches each of the following definitions or descriptions
Premises:
The concept that recognizes that the present value of an opportunity to receive one dollar in the future is less than one dollar
Annuity with the cash flows occurring at the end of each period
Paid to investors and creditors for the use of their assets
Review conducted to determine whether a project actually generated the results that were originally expected
Factors used to convert a series of future cash inflows into their present value equivalent
The rate that produces a net present value of zero for an investment in a capital project
Purchase of long-term operational assets that involves a long term commitment of funds
Technique that evaluates investment opportunities by determining the length of time necessary to recover the initial net investment
Measure of profitability computed by dividing the average incremental increase in annual net income by the average investment cost
An equal series of cash flows received over equal intervals of time at a constant rate of return
Rate of return required to persuade a company to accept an investment opportunity
Evaluation technique in which future cash flows are discounted back to present value equivalents, from which the cost of the investment is subtracted
Responses:
Accumulated conversion factors
Annuity
Capital investments
Cost of capital
Internal rate of return
Minimum rate of return
Net present value method
Ordinary annuity
Payback method
Postaudit
Time value of money
Unadjusted rate of return
Correct Answer:
Premises:
Responses:
The concept that recognizes that the present value of an opportunity to receive one dollar in the future is less than one dollar
Annuity with the cash flows occurring at the end of each period
Paid to investors and creditors for the use of their assets
Review conducted to determine whether a project actually generated the results that were originally expected
Factors used to convert a series of future cash inflows into their present value equivalent
The rate that produces a net present value of zero for an investment in a capital project
Purchase of long-term operational assets that involves a long term commitment of funds
Technique that evaluates investment opportunities by determining the length of time necessary to recover the initial net investment
Measure of profitability computed by dividing the average incremental increase in annual net income by the average investment cost
An equal series of cash flows received over equal intervals of time at a constant rate of return
Rate of return required to persuade a company to accept an investment opportunity
Evaluation technique in which future cash flows are discounted back to present value equivalents, from which the cost of the investment is subtracted
Premises:
The concept that recognizes that the present value of an opportunity to receive one dollar in the future is less than one dollar
Annuity with the cash flows occurring at the end of each period
Paid to investors and creditors for the use of their assets
Review conducted to determine whether a project actually generated the results that were originally expected
Factors used to convert a series of future cash inflows into their present value equivalent
The rate that produces a net present value of zero for an investment in a capital project
Purchase of long-term operational assets that involves a long term commitment of funds
Technique that evaluates investment opportunities by determining the length of time necessary to recover the initial net investment
Measure of profitability computed by dividing the average incremental increase in annual net income by the average investment cost
An equal series of cash flows received over equal intervals of time at a constant rate of return
Rate of return required to persuade a company to accept an investment opportunity
Evaluation technique in which future cash flows are discounted back to present value equivalents, from which the cost of the investment is subtracted
Responses:
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