Asked by Reshelle Ytuarte on Jun 18, 2024
Verified
Which of the following does NOT incorporate discounted cash flow (DCF) valuation in its calculation?
A) Discounted payback
B) Profitability index
C) Net present value
D) Internal rate of return
E) Average accounting return
Discounted Cash Flow
A valuation method used to estimate the attractiveness of an investment opportunity, by calculating the present value of expected future cash flows.
Discounted Payback
A capital budgeting method that calculates the amount of time needed to recoup an investment based on its discounted cash flows.
Profitability Index
A calculation used to assess the desirability of an investment, defined as present value of future cash flows divided by initial investment.
- Compute and elucidate the mean accounting return (AAR) for evaluating a project.
Verified Answer
Learning Objectives
- Compute and elucidate the mean accounting return (AAR) for evaluating a project.
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