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matching questions 120 match the following terms with the definitions 1 the time exp 4295879


Matching Questions

120.Match the following terms with the definitions.  

1. The time expected to pass before the net cash flows from an investment equals its initial cost.              Internal Rate of Return             

2. Annual after-tax net income divided by annual average investment.Net Cash Flow

3. Initial cost of an investment subtracted from discounted future cash flows from the investment.              Hurdle Rate             

4. Equals the discount rate that results in a net present value of zero.Payback Period1

5. A process of analyzing alternative long-term investments and deciding which assets to acquire or sell.              Accounting Rate of Return             

6. A minimum acceptable rate of return.Capital Budgeting

7. Cash inflows minus cash outflows for the period.Net Present Value

121.Match the following terms with the definitions.  

1. The potential benefits lost by taking a specific action when two or more alternative choices are available.              Out-of-pocket cost             

2. A series of cash flows of equal dollar amount over equal time periods.Annuity

3. An estimate of an asset's value to the company; computed by discounting the future net cash flows from the investment the project's required rate of return and then subtracting the initial amount invested.              Net present value             

4. A cost that requires a future outlay of cash and is relevant for current and future decision making.              Sunk cost             

5. An additional cost incurred if a company pursues a certain course of action.Incremental cost             

6. A cost that cannot be avoided or changed because it arises from past decision; irrelevant to future decisions.              Opportunity cost             



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