The payback period is multiplied for constant increase in yearly future cash flows to calculate __________?
Correct answer: B. net initial investment
- A. cash value of money
- B. net initial investment
- C. net future value
- D. time value of money
Explanation
For uniform annual cash flows, multiplying the payback period by the annual cash flow gives the net initial investment: Payback period × annual cash flow.
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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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