Which capital budgeting technique measures all expected future cash inflows and outflows as if they occurred at a single point in time? Group of answer choices a. sensitivity analysis b. accrual accounting rate-of-return method c. net present value method d. payback method

Which capital budgeting technique measures all expected future cash inflows and outflows as if they occurred at a single point in time? Group of answer choices a. sensitivity analysis b. accrual accounting rate-of-return method c. net present value method d. payback method

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...

See similar textbooks

Related questions

Q: Defining capital investments and the capital budgeting process Match each definition with its…

A: Capital investments: Capital investments refers to investing funds in a fixed asset in order to…

Q: Payback period is the time in which the initial cost of an investment is expected to be recovered…

A: The payback period is the time it takes to repay the cost of an investment or to reach the breakeven…

Q: How is the payback period used in capital budgeting? Multiple Choice As a measure of a project's…

A: The payback period is the amount of time it takes for you to recover the cost of your investment. In…

Q: This method evaluates the return of an investment by dividing the annual average income by the…

A: By dividing the annual average income by the average investment, return on investment is calculated.…

Q: Which of the following methods of methods of capital budgeting is base cashflows: Payback NPV…

A: As per Bartleby guidelines, If multiple questions are posted, only the first 1 question will be…

Q: Which of the following is a capital budgeting method? A. net present value B. inventory turnover…

A: Please find the answer to the above question below:

Q: Which of the following is the correct definition for present value (PV)?

A: Present value is an important concept in finance which is based on the concept of time value of…

Q: The internal rate of return method assumes that a project's cash flows are reinvested at the:

A: The internal rate of return is a financial analysis tool that is used to estimate the profitability…

Q: Describe the strengths and weeknesses of the following:: Cash payback period Adverage accounting…

A: As you have given multiple questions, first 3 will be answered. Please re-post the question for…

Q: Suppose an investment has conventional cash flows with positive NPv. How would it impact your…

A: NPV is the net present value of a project. When the net present value of a project is positive in…

Q: Suppose an investment has conventional cash flows with positive NPV. How would it impact your…

A: Net Present Value is Positive of the project. Impact of these measurements on the decision of…

Q: We discussed the use of sensitivity analysis and simulation analysis in the context of estimating…

A: Cash flow can be inwards or outwards. Cash flow includes the fallow of cash only, it does not…

Q: This method solves for the interest rate that equates the equivalent worth of a project's cash…

A: Payback period - Initial investment / Cash flow per year. It is the period taken to recover the…

Q: Which of the following methods of capital budgeting indicates the time period required to recover…

A: Capital budgeting is a process of identifying high return project or projects which will increase…

Q: fe of the project. Which one of the following statements is correct with respect to this…

A: NPV Method assumes that all the cash flows are reinvested at the company's Cost of Capital. IRR…

Q: When using the NPV method for a particular investment decision, if the present value of all cash…

A: When NPV method is used the investment is measured on three scenarios Positive NPV Where the…

Q: Critically think and outline the difficulties that might come up in actual applications of the…

A: The following are the difficulties of capital budgeting: Forecasting the cash flow The time horizon…

Q: A project can have as many different internal rates of return as it has: O changes in the sign of…

A: The internal rate of return (IRR) is used to measure the profitability of investments. It is the…

Q: Question #1 Describe capital budgeting decisions and use the net present value (NPV) method of…

A: CAPITAL BUDGETING IS THE PROCESS THAT HELPS IN PLANNING THE INVESTMENT PROJECTS OF AN ORGANIZATION…

Q: Which of the following capital budgeting techniques recognizes noncash revenues and expenses? *…

A: Solution: "Accounting rate of return" recognizes noncash revenues and expenses. This is because…

Q: Of the capital budgeting techniques discussed, which works equally well with normal and non-normal…

A: The correct answer is “Net present value”.

Q: Describe Capital budgeting techniques with their respective strength and weakness for IRR , NPV , PI…

A: Capital budgeting is the process used by the companies to determine whether to invest in a long-term…

Q: . If the company’s capital budgeting analyst decidedto show all projected cash flows, both positive…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: A method of budgeting that estimates todays value of money to be received in the future; it is…

A: Capital budgeting methods include adjustments for the time value of money.

Q: The NPV method assumes that cash inflows associated with a particular investment occur when? Group…

A: Net present value method or NPV in this present value of cash flow is determined and from that…

Q: Which of the following statements best describes the difference between the IRR method and the MIRR…

A: Note: As per the policy, we are supposed to solve one question at a time. Kindly repost the further…

Q: Suppose an investment has conventional cash flows with positive NPV. how would it impact your…

A: Conventional cash flow is a cash flow in which an investment or project has an initial cash outflow…

Q: Mathematically, we can determine the rate of return for a given project’s cash flow series by…

A: When Cash Flows are discounted by using Internal Rate of Return for a period of cash flows held.…

Q: Give a conclusion about capital budgeting and its techniques.

A: Capital budgeting is the technique that is employed by businesses to make an evaluation of major…

Q: One of the following sentences is true regarding the money weighted rate of return and the time…

A: The Time-Weighted Rate of Return is compounded rate of return that is computed by finding the…

Q: How does depreciation enter into the calculation of operating cash inflows? Explain theu…

A: Depreciation allocates expenses related to assets over their useful life and it assists in reducing…

Q: How is the estimation of relevant cash flows one of the most important parts of this…

A: Capital budgeting is the process a company follows to decide whether to purchase a fixed asset or…

Q: The rate of return that equates the present value of cash inflows and outflows is the: A. hurdle…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: The net present value (NPV) method of investment project analysis assumes that the project's cash…

A: In NPV analysis, project's cashflows are discounted at the present value using a relevant discount…

Q: 1-What are the relevant cash inflows and outflows for capital budgeting decisions?

A: Hi student Since there are multiple questions, we will answer only first question. If you want…

Q: In considering the payback period, ____. a. it considers the time value of money in determining…

A: The term payback period refers to the amount of time required by a project to recover its initial…

Q: The periodic cash flows associated with an investment project include which of the following O…

A: solution concept periodic cash flow The term cash flow means the cash flow which arises every period…

Q: Which of the following is a present value method of analyzing capital investment proposals? Uaverage…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Discounted cash flow capital budgeting techniques do not O take into consideration an unconventional…

A: Discounted cash flow method is a vital capital budgeting technique. It has been explained in the…

Q: Consider the following project cash flow. YEAR CASH FLOW 0 -1000 1 500 2 500 3 500 4 500 5 500 Use…

A: Internal rate of return is the rate at which the future value of future cashflow is equal to cash…

Question

Which capital budgeting technique measures all expected future cash inflows and outflows as if they occurred at a single point in time?

Group of answer choices

a. sensitivity analysis

b. accrual accounting rate-of-return method

c. net present value method

d. payback method

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

How does the size of the initial investment affect the internal rate of return on the net present value models?
The expected period of time that will elapse between the date of a capital investment and thecomplete recovery of the amount of cash investedis called: A.The average rate of return period B.The cash payback period C.The net present value period D.The internal rate of return period
Which of the following methods of capital budgeting tries to equate the present value of cash inflows to present value of cash outflows? a. Net present value b. Payback period c. Internal rate of return d. Accounting Rate of return
Finding the present value of future cash flows is called and finding the future value of present cash flows is called O A. analytics, tracking B. capital budgeting, short-term budgeting C. discounting, compounding D. financial ratio analysis, financial statement analysis O E. fundamental analysis, technical analysis
Which capital budgeting technique defines returns in terms of income instead of cash flows? a) The payback period b) The internal rate of return technique c) The net present value technique d) The unadjusted rate of return method
What is the most commonly used capital budgeting procedures? Select one: a. IRR b. Payback period c. Discounted Payback period d. NPV e. Profitability Index
Describe the strengths and weeknesses of the following:: Cash payback period Adverage accounting rate of return Excess present value index Capital expenditure analysis Calucating net present value
Question: Which of the following methods of capital budgeting accounts for the time value of money? Options: A) Net Present Value (NPV) B) Payback Period C) Accounting Rate of Return (ARR) D) Profitability Index (PI)
Cash Payback Period, Net Present Value Method, and Analysis
Question:Describe Capital budgeting techniques with their respective strength and weakness for IRR , NPV , PI and Pay back period
Which of the following methods of capital budgeting indicates the time period required to recover the investment? a. Internal rate of return b. Accounting Rate of return c. Payback period d. Net present value
The measurement basis most often used to report a long-term payable representing a commitment to pay money at a determinable future date is Historical cost. Current cost. Net realizable value. Present value of future cash flows.