Busıness Fınance Iı Deneme Sınavı Sorusu #1033358

Which capital budgeting evaluation technique tells the length of time it takes cumulative present values of cash inflows will be equal to the initial cash outflow?


Payback period

Discounted payback period

Net present value

Initial rate of return

Modified internal rate of return


Yanıt Açıklaması:

Same as payback period, discounted payback period tells the length of time it takes to get the initial cash outflow back, that is the period from the initial cash outflow to the time when the investment project’s cash inflows add up to the initial cash outflow. The only difference is cumulative present values of cash inflows (rather than numerical sum values) will be equal to the initial cash outflow. The correct answer is B.

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