Capital Budgeting

2. can execute project A or B, but not both
4. NPV is equal to _____ in IRR discount rate computation
5. if realized (cash received from sale) can be recognized as a reduction in the initial investment or as a cash inflow.
7. is the rate of return of an investment project over its useful life
9. other term for accounting rate of return
10. an annuity with an infinite life
13. whether a proposed project is acceptable
15. internal rate of return is more than the minimum required rate of return
16. a decision that is selecting from among several acceptable alternatives.
19. the return that the company would have received had it pursued a different project instead
21. financing costs
22. the most flexible method for comparing competing projects
23. preference decisions
26. The higher the project profitability index, the more desirable the project
27. also called the return on capital employed (ROCE)
28. used for significant investments in projects that have long-term implications s
29. simplest form of capital budgeting analysis, but it's also the least accurate.

1. minimum amount that the project needs to earn from its cash inflows to cover the costs
3. limited funds available
6. cash outlays for salaries, advertising, and other operating expenses
8. compares the present value of a project’s cash inflows to the present value of its cash outflows
11. is the length of time that it takes for a project to recover its initial cost
12. a Decision that do not involve any revenues
14. a rate of return equal to the rate used to discount the future cash flows,
17. checking whether or not expected results are actually realized
18. this maybe increased by capital budgeting
20. projects whose net present values are negative
24. divide the net present value of the project by the investment required
25. current assets less current liabilities
30. A set of cash flows that are equal in each and every period