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The payback period rule quizlet

WebbThe discounted payback rule calculates the payback period and then discounts the payback period at the opportunity cost of capital. True. False. The benefit-cost ratio is defined as the ratio of: net present value cash flows to initial investment. present value of cash flows to initial investment. net present value of cash flows to IRR. Webb1) NPV 2) Payback period 3) Discounted payback period 4) Average Accounting Return 5) Internal Rate of Return 6)Modified internal rate of return 7) Profitability index **know …

Net Present Value (NPV) Rule: Definition, Use, and Example

WebbVideo created by Yonsei University for the course "Applying Investment Decision Rules for Startups". Capital budgeting is the process of deciding ... you will study the three most popular capital budgeting techniques in practice: Net present value (NPV), Payback period, and Internal rate of return (IRR). Welcome to This Course 0:57. 1.1 ... Webb18 apr. 2024 · Net Present Value Rule: The net present value rule, a logical outgrowth of net present value theory, refers to the idea that company managers or investors should only invest in projects or engage ... contoh tagihan kartu kredit ovo u card https://salermoinsuranceagency.com

FIN 4424 Test 1 Flashcards Quizlet

Webb31 maj 2024 · The internal rate of return (IRR) estimates the profitability of potential investments using a percentage value rather than a dollar amount. It is also referred to as the discounted flow rate of... Webbför 2 dagar sedan · The payback period can be found by dividing the initial investment costs of $100,000 by the annual profits of $25,000, for a payback period of 4 years. Function of Discounted Payback Period. WebbThe payback period for this investment is 7 and a half years - which we calculate by dividing $3 million with $400,000, using the formula shown below: Payback Period = $3,000,000 / $400,000 = 7,5 years. Now, consider a second project that costs $400,000 with no associated cash savings, that will make the company $200,000 each year for the next ... tatum allen

FIN 4424 Test 1 Flashcards Quizlet

Category:Which one of the following statements is correct a A longer payback …

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The payback period rule quizlet

Chapter 8 Questions Flashcards Quizlet

Webb43) The NPV rule is preferred to the discounted payback period as a project evaluation criterion because the discounted payback period rule ignores: I. The initial cost II. The timing of cash flows prior to the discounted payback period III. Any cash flows beyond the discounted payback period. a) III only b) I and II only c) I and III only d ... Webb20 sep. 2024 · The discounted payback period is a capital budgeting procedure used to establish the profitability of a project.

The payback period rule quizlet

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WebbPayback period Formula = Total initial capital investment /Expected annual after-tax cash inflow. Let us see an example of how to calculate the payback period when cash flows are uniform over using the full life of … WebbWhich of the following investment rules does not use the time value of money concept? A. Net present value B. Internal rate of return C. The payback period D. Profitability index, 2. …

Webb14 mars 2024 · The Payback Period shows how long it takes for a business to recoup an investment. This type of analysis allows firms to compare alternative investment opportunities and decide on a project that returns its investment in the shortest time if that criteria is important to them. WebbGiven some predetermined cutoff for the payback period, the decision rule is to accept projects that pay back before this cutoff, and reject projects that take longer to pay back. The worst problem associated with the payback period is …

Webb4 feb. 2024 · The payback period is therefore expressed this way: Initial investment/cash flow per year = $150,000/$50,000 - 3 years payback. Advantages of the Payback Method. WebbPayback Period Steps 1. Estimate the expected cash flows 2. Subtract future cash flows from the initial cost until the initial investment has been recovered 3. The number of …

WebbThe payback period rule ______ a project if it has a payback period that is less than or equal to a particular cutoff date. accepts Which of the following are weaknesses of the …

WebbPayback period the amount of time required for an investment to generate cash flows sufficient to recover its initial cost. Based on the payback rule, an investment is … contoh swara u jejegWebbPayback Period. Discounted Payback Period. ... "The payback period statistic is a capital budgeting technique that generates decision rules and how quickly they return their initial investment. ... chem Flashcards _ Quizlet.pdf. 0. chem Flashcards _ Quizlet.pdf. 22. Miranda and Hinckley.docx. 0. contoh teori manajemen privasi komunikasiWebbThe Payback Period Rule states that a company will accept a project if: A. The calculated payback is less than three years for all projects. B. The project stays within budget. C. The... tatum and oakley videos