25 - Capital Budgeting Techniques
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Practice Questions
Test your understanding with targeted questions
What is capital budgeting?
💡 Hint: Think about investment planning.
Name two traditional capital budgeting techniques.
💡 Hint: Relate them to basic evaluations.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula to calculate the Payback Period?
💡 Hint: Think about recovering your initial costs.
True or False: NPV is the difference between cash inflows and outflows.
💡 Hint: Consider the flow of money over time.
1 more question available
Challenge Problems
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A company invests $500,000 in a new product line with expected annual cash inflows of $100,000 for 6 years. What is the Payback Period?
💡 Hint: What does it take to break even?
Evaluate whether to invest in a project with an initial outlay of $200,000, expected cash inflows of $50,000 each year for 5 years, and a discount rate of 8%. Calculate the NPV.
💡 Hint: Consider discounting cash flows back to present value.
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