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problem1: Some firms use the payback period as a decision criterion or as a supplement to sophisticated decision techniques because

[A]      The determination of payback is an objectively determined criteria

[B]      It can take the place of the net present value approach

[C]      It can be viewed as a measure of risk exposure

[D]      It explicitly considers the time value of money

problem2: The _____ is the discount rate that equates the present value of the cash inflows with the initial investment

[A]      a payback period

[B]      average rate of return

[C]      cost of capital

[D]      internal rate of return

problem3: The average of using simulation in the capital budgeting process is

[A]      Dependability of predetermined probability distributions

[B]      That it generates a continuum of risk-return tradeoffs rather than a single point estimate

[C]      Ease of calculation

[D]      The availability of a continuum of risk-return trade-offs which may be used as the basis for decision making

 

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  • Category:- Basic Finance
  • Reference No.:- M916874

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