In a capital budgeting decision, the required rate of return (discount rate) does not need to be specified in advance for which of the following
$\begin{array}{lrr} \text {Net Present Value}& \text { Internal Rate of Return}\\end{array}$

A.$\begin{array}{lrr}
&&\text { Yes } &&&&&&&& \text { Yes } &\
\end{array}$

B.$\begin{array}{lrr}
&& \text { Yes } &&&&&&&& \text { No} &\
\end{array}$

C.$\begin{array}{lrr}
&& \text { No} &&&&&&&& \text { No } &\
\end{array}$

D.$\begin{array}{lrr}
&& \text { No } &&&&&&&& \text { Yes } &\
\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Question

In a capital budgeting decision, the required rate of return (discount rate) does not need to be specified in advance for which of the following
 $\begin{array}{lrr} \text {Net Present Value}&  \text { Internal Rate of Return}\\end{array}$

A.$\begin{array}{lrr}
  &&\text { Yes } &&&&&&&& \text { Yes } &\
\end{array}$

B.$\begin{array}{lrr}
&&  \text { Yes }  &&&&&&&& \text { No} &\
\end{array}$

C.$\begin{array}{lrr}
 && \text { No}  &&&&&&&& \text { No } &\
\end{array}$

D.$\begin{array}{lrr}
 && \text { No } &&&&&&&& \text { Yes } &\
\end{array}$

A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

Option B is the only option where the required rate of return (discount rate) is not needed to be specified in advance. This is because the payback period method only considers the time it takes to recover the initial investment, and does not involve discounting future cash flows. Therefore, the required rate of return is not a relevant factor in this method. However, it is important to note that the payback period method has limitations and should not be used as the sole basis for a capital budgeting decision.

In a Capital Budgeting Decision, the Required Rate of Return Net Present Value Internal Rate of Return\begin{array}{lrr} \text {Net Present Value}& \text { Internal Rate of Return}\\\end{array}Net Present Value​ Internal Rate of Return​

In a Capital Budgeting Decision, the Required Rate of Return $\begin{array}{lrr} \text {Net Present Value}& \text { Internal Rate of Return}\\\end{array}$