{"id":33708,"date":"2024-04-15T09:20:34","date_gmt":"2024-04-15T09:20:34","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=33708"},"modified":"2024-04-15T09:20:34","modified_gmt":"2024-04-15T09:20:34","slug":"which-of-the-following-techniques-for-appraisal-of-investment-proposals-are-based-on-the-time-value-of-money","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-techniques-for-appraisal-of-investment-proposals-are-based-on-the-time-value-of-money\/","title":{"rendered":"Which of the following techniques for appraisal of investment proposals are based on the time value of money?"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Accounting Rate of Return&#8221; option2=&#8221;Internal Rate of Return&#8221; option3=&#8221;Profitability Index Method&#8221; option4=&#8221;Earnings Per Share&#8221; correct=&#8221;option2&#8243;]<!--more--><\/p>\n<p>The correct answer is: B. Internal Rate of Return (IRR).<\/p>\n<p>The IRR is a technique for evaluating capital budgeting projects that takes into account the time value of money. It is the discount rate that makes the net present value of a project equal to zero. A project is considered to be financially feasible if its IRR is greater than or equal to the company&#8217;s required rate of return.<\/p>\n<p>The other options are not based on the time value of money.<\/p>\n<ul>\n<li>Accounting Rate of Return (ARR) is a profitability measure that calculates the average annual return on a project based on its net income and initial investment. It does not take into account the time value of money.<\/li>\n<li>Profitability Index Method (PIM) is a capital budgeting technique that compares the present value of a project&#8217;s future cash flows to its initial investment. It does not take into account the time value of money.<\/li>\n<li>Earnings Per Share (EPS) is a measure of a company&#8217;s profitability that is calculated by dividing its net income by the number of shares outstanding. It does not take into account the time value of money.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Accounting Rate of Return&#8221; option2=&#8221;Internal Rate of Return&#8221; option3=&#8221;Profitability Index Method&#8221; option4=&#8221;Earnings Per Share&#8221; correct=&#8221;option2&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[700],"tags":[],"class_list":["post-33708","post","type-post","status-publish","format-standard","hentry","category-business-finance","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which of the following techniques for appraisal of investment proposals are based on the time value of money?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-techniques-for-appraisal-of-investment-proposals-are-based-on-the-time-value-of-money\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which of the following techniques for appraisal of investment proposals are based on the time value of money?\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Accounting Rate of Return&#8221; 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