GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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IRR equivalent to the expenses of capital
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IRR more noteworthy than the expenses of capital
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IRR is not exactly the expenses of capital
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none of the above mentioned
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Detailed explanation-1: -Q:4 Which of the accompanying addresses how much time it takes for a capital budgeting undertaking to recuperate its underlying expense? Answer: (B) Payback period. Explanation: A basic strategy for capital budgeting is the Payback Period.
Detailed explanation-2: -The payback period disregards the time value of money and is determined by counting the number of years it takes to recover the funds invested. For example, if it takes five years to recover the cost of an investment, the payback period is five years.
Detailed explanation-3: -False-A capital budgeting project is accepted if the internal rate of return equals or exceeds the required internal rate of return. The net present value method can be used in situations where the required rate of return varies over the life of the project.
Detailed explanation-4: -It does not include sunk costs.