{"id":8642,"date":"2024-04-15T03:03:54","date_gmt":"2024-04-15T03:03:54","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=8642"},"modified":"2024-04-15T03:03:54","modified_gmt":"2024-04-15T03:03:54","slug":"pick-up-the-method-used-for-project-evaluation-and-selection-in-capital-budgeting-from-the-following-a-payback-period-b-internal-ratio-of-return-c-net-present-worth-d-all-the-above","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/pick-up-the-method-used-for-project-evaluation-and-selection-in-capital-budgeting-from-the-following-a-payback-period-b-internal-ratio-of-return-c-net-present-worth-d-all-the-above\/","title":{"rendered":"Pick up the method used for project evaluation and selection in capital budgeting from the following: A. Payback period B. Internal ratio of return C. Net present worth D. All the above"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9bf023e93e7\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Payback period                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Internal ratio of return                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Net present worth                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    All the above                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>D. All the above<\/strong><\/p>\n<p>Payback period, internal rate of return, and net present worth are all methods used for project evaluation and selection in capital budgeting.<\/p>\n<ul>\n<li><strong>Payback period<\/strong> is the amount of time it takes for a project to recover its initial investment. It is calculated by dividing the initial investment by the annual net cash flow. A shorter payback period is generally considered to be better.<\/li>\n<li><strong>Internal rate of return<\/strong> is the rate of return that a project earns on its investment. It is calculated by finding the interest rate that makes the present value of the project&#8217;s cash flows equal to zero. A higher IRR is generally considered to be better.<\/li>\n<li><strong>Net present worth<\/strong> is the difference between the present value of the project&#8217;s cash inflows and the present value of its cash outflows. A positive NPV indicates that the project is expected to generate a profit. A negative <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> NPV indicates that the project is expected to lose money.<\/li>\n<\/ul>\n<p>Each of these methods has its own advantages and disadvantages. Payback period is simple to calculate and understand, but it <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> does not take into account the time value of money. IRR is more accurate than payback period, but it can be difficult to calculate and it can be affected by the project&#8217;s cash flow pattern. NPV is the most accurate method, but it can be difficult to understand.<\/p>\n<p>The best method to use for project evaluation and selection depends on the specific project and the company&#8217;s objectives. In general, companies use a combination of methods to make their decision.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[656],"tags":[],"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>Pick up the method used for project evaluation and selection in capital budgeting from the following: A. Payback period B. Internal ratio of return C. Net present worth D. 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