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Intermediate Accounting14th EditionDonald E. Kieso, Jerry J. Weygandt, Terry D. Warfield 1,471 solutions Which of the following methods of evaluating capital investment proposals uses the concept of present value to compute a rate of return?Answer and Explanation: The correct answer is option a. Internal rate of return. In capital budgeting, computing the internal rate of return in evaluating capital investment proposals uses the present value concept.
Which of the following capital investment evaluation methods use present values?Net Present Value method is the evaluation method that uses present values.
Which method of evaluating capital investment proposals uses the concept of time value of money?The correct answer is answer choice d. Internal rate of return due to the following reasons: a)Average rate of return does not take time value of money into account and thus the preset value of the investment does not affect the calculation.
What is a present value method of analyzing capital investment proposals?The present value is the value of the expected cash flows in today's dollars by discounting or subtracting the discount rate. If the result or present value of the cash flows is greater than the rate of return from the discount rate, the investment is worth pursuing.
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