alleryStart learning →Which measures do economists prefer over payback for return?
ASales and margin
BNPV and IRR
CStock and debtors
DROCE and ROA
Answer & Solution
Correct answer: B. NPV and IRR
Economists prefer net present value and internal rate of return because they account for the time value of money.
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Related questions
Rs 9,00,000 is invested and net cash flow is Rs 1,80,000 a year. Payback?A: profit Rs 40,000 on average investment Rs 2,00,000. B: Rs 54,000 on Rs 3,60,000. HigherCost Rs 12,00,000 and scrap Rs 2,00,000. Average investment under ARR?Cost Rs 3,00,000, scrap Rs 60,000, 4 years, total profit Rs 1,44,000. ARR?Which goal underlies capital budgeting in corporate finance?Capital budgeting mainly concerns which type of spending?Companies create value when their return on capital is above what?What drawback makes older businesses show a higher ROCE?