Capital Budgeting Rates Flashcards
1
Q
Net Present Value
A
The difference between present value of cash inflows and the present value of cash outflows over a period of time.
2
Q
Accounting Rate of Return
A
Net Income / Average Investment
3
Q
Payback Method
A
Investment / Annual Cash Flow
4
Q
Internal Rate of Return
A
Rate of return require for PV of future cash flow to equal investment
