The net initial investment is divided by uniform increasing in future cash flows to calculate __________?
Correct answer: C. payback period
- A. discounting period
- B. investment period
- C. payback period
- D. earning period
Explanation
For uniform cash inflows, dividing net initial investment by the annual cash flow gives the number of years needed to recover the investment, called the payback period.
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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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