Practice Traditional Techniques (Non-discounted Methods) - 25.5.A | 25. Capital Budgeting Techniques | Management 1 (Organizational Behaviour/Finance & Accounting)
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25.5.A - Traditional Techniques (Non-discounted Methods)

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What does the Payback Period measure?

💡 Hint: Think about how long it takes to make back your money.

Question 2

Easy

Is the ARR based on cash flows or accounting profits?

💡 Hint: Consider what type of financial statement this refers to.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the Payback Period measure?

  • The time to recover an investment
  • The total profit of an investment
  • The return on equity

💡 Hint: Think about the meaning of 'payback'.

Question 2

True or False: The Accounting Rate of Return considers cash flows.

  • True
  • False

💡 Hint: Consider which type of financial data is being referred to.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company invests in a project costing $500,000. It expects to receive $150,000 per year for the first three years and $300,000 in the fourth year. Calculate the Payback Period and analyze if it is a worthwhile investment.

💡 Hint: Create a cash flow chart to visualize recovery.

Question 2

An investment shows a $10,000 average annual profit out of a $50,000 investment. Discuss how this would affect decision-making, especially relevant to non-cash items.

💡 Hint: Consider non-cash items like depreciation and their impact on actual cash flow.

Challenge and get performance evaluation