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Presented Below Are Terms Preceded by Letters a Through G

Question 157

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Presented below are terms preceded by letters a through g and followed by a list of definitions 1 through 7. Match the letter of the term with the definition

Premises:
Initial cost of an investment subtracted from discounted future cash flows from the investment.
A process of analyzing alternative long-term investments and deciding which assets to acquire or sell.
Equals the discount rate that results in a net present value of zero.
The required rate of return.
Annual after-tax net income divided by annual average investment.
Cash inflows minus cash outflows for the period.
The time expected to pass before the net cash flows from an investment equals its initial cost.
Responses:
Net present value
Net cash flow
Hurdle rate
Payback period
Capital budgeting
Internal rate of return
Accounting rate of return

Correct Answer:

Initial cost of an investment subtracted from discounted future cash flows from the investment.
A process of analyzing alternative long-term investments and deciding which assets to acquire or sell.
Equals the discount rate that results in a net present value of zero.
The required rate of return.
Annual after-tax net income divided by annual average investment.
Cash inflows minus cash outflows for the period.
The time expected to pass before the net cash flows from an investment equals its initial cost.
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