Which technique expresses NPV as an annualised cash flow?
AEquivalent annuity
BPayback method
CProfitability index
DReal options value
Answer & Solution
Correct answer: A. Equivalent annuity
The NPV is divided by the present value of the annuity factor to give a yearly amount.
Keep practising Payback Period
Browse all Payback Period questions for CA Inter, or explore more Financial Management topics.
Related questions
Why may payback overlook a valuable long-life project?Rs 1,000 is invested, returning Rs 500 at the end of years 1 and 2. Payback?Energy payback period is the time over which what equals energy spent?Which of these is a simplified capital budgeting method?Surplus cash from a firm's present and past earnings is called what?The real value of capital budgeting lies mainly in doing what?When may one project have several possible IRRs?For mutually exclusive projects, choosing the highest IRR may select a project with