The technique that recognizes the time value of money by discounting the after-tax cash flows for a project over its life to time period zero using the company's minimum desired rate of return is called the
Answer(s): A
The net present value method discounts future cash flows to the present value using some arbitrary rate of return, which is presumably the firm's cost of capital. The initial cost of the project is then deducted from the present value. If the present value of the future cash flows exceeds the cost, the investment is considered to be acceptable.
The technique that reflects the time value of money and is calculated by dividing the present value of the future net after- tax cash inflows that have been discounted at the desired cost of capital by the initial cash outlay for the investment is called the
Answer(s): C
The profitability index is another term for the excess present value index. It measures the ratio of the present value of future net cash inflows to the original investment. In organizations with unlimited capital funds, this index will produce no conflicts in the decision process. If capital rationing is necessary, the index will be an insufficient determinant. The capital available as well as the dollar amount of the net present value must both be considered.
The technique that measures the estimated performance of a capital investment by dividing the project's annual after4ax net income by the average investment cost is called the
Answer(s): D
The accounting rate of return is calculated by dividing the annual after-tax net income from a project by the book value of the investment in that project. The time value of money is ignored.
The technique that incorporates the time value of money by determining the compound interest rate of an investment such that the present value of the after-tax cash inflows over the life of the investment is equal to the initial investment is called the
The internal rate of return (IRR) is the discount rate at which the present value of the cash inflows equals the present values of the cash outflows (including the original investment). Thus, the NPV of the project is zero at the IRR. The IRR is also the maximum borrowing cost the firm can afford to pay for a specific project. The IRR is similar to the yield rate/effective rate quoted in the business media.
The technique that measures the number of years required for the after-tax cash flows to recover the initial investment in a project is called the
Answer(s): B
The usual payback formula divides the initial investment by the constant net annual cash The payback method is unsophisticated in that it ignores the time value of money, but it is widely used because of its simplicity and emphasis on recovery of the initial investment.
Share your comments for Financial CMA exam with other users:
awesome training material
where is dump
q. 289 - the correct answer should be b not d, since the question asks for the most secure way to provide access to a s3 bucket (a single one), and by principle of the least privilege you should not be giving access to all buckets.
please i need if possible h12-831,
good collection of questions and solution for pl500 certification
i would like to appear the exam.
i am very happy as i cleared my comptia a+ 220-1101 exam. i studied from as it has all exam dumps and mock tests available. i got 91% on the test.
need this dump
its really good to eventuate knowledge before appearing for the actual exam.
this is great
please i want the questions to pass the exam
i need to pass exam
great, i appreciate it.
please could you upload (isc)2 certified in cybersecurity (cc) exam questions
good questions, wrong answers
im preparing for exams
question no: 42 isnt azure vm an iaas solution? so, shouldnt the answer be "no"?
im study azure
i need this now
i took the aws saa-c03 test and scored 935/1000. it has all the exam dumps and important info.
good questions
well explained
i got the full version and it helped me pass the exam. pdf version is very good.
provide the download link, please
please upload thank.
please can you share 1z0-1055-22 dump pls
i will wait impatiently. thank youu
is it possible to clear the exam if we focus on only these 156 questions instead of 623 questions? kindly help!
really helped with preparation of my scrum exam
very informative and through explanations
prep for exam
thanks for helping us
i prepared for the eccouncil 350-401 exam. i scored 92% on the test.
aba questions to practice