Answers.
What type of return are firms seeking when considering a real asset project? - Answer
Economic Profit
NPV - Answer Net Present Value
IRR - Answer internal Rate of Return
PB - Answer Pay Back
DPB - Answer Discounted Payback
MIRR - Answer Modified internal Rate of Return
PI - Answer Profitability Index
Which one of these capital budgeting techniques is preferred for most projects? - Answer NPV
Which one of these methods best applies to a project when a firm is facing a time constraint? -
Answer PB (Payback)
Which one of these factors affects the capital budgeting techniquw used to analyze a project? -
Answer Wether or not the time value of money is to be considered.
Capital budgeting techniques that use time as their unit of measurement: - Answer PB
(Payback
DPB (Discounted Payback)
If a firm is concerned about capital constraints and needs to prioritize its projects, which
budgeting technique should the firm use? - Answer PI (Profitability Index)
Rate is the unit of measurement for which of these capital budgeting techniques? select all that
apply: - Answer PI, IRR, and MIRR