The method, which calculates the time to recoup initial investment of project in form of expected cash flows is known as __________?
Correct answer: B. payback method
- A. net value cash flow method
- B. payback method
- C. single cash flow method
- D. lean cash flow method
Explanation
The payback method measures how long a project takes to recover its initial investment from expected cash inflows. It focuses on recovery time rather than profitability or present value.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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More Cost Accounting questions
The rate of return to cover a risk of investment and decrease in purchasing power, as a result of inflation is known as _________?
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The payback period is multiplied for constant increase in yearly future cash flows to calculate __________?
If the payback period is 4 years and the uniform increases in cash flows per year is $2750000, then the net initial investment can be _____________?
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The net initial investment is divided by uniform increasing in future cash flows to calculate __________?