2. Match each of the following terms with the appropriate definition.The time expected torecover the cash initiallyinvested in a project.A minimum acceptable rateof return on a potentialinvestment.1. DiscountingA return on investmentwhich results in a zero netpresent value.2. Net Present ValueA comparison of the cost of3. Capital Budgetingan investment to itsprojected cash flows at asingle point in time.4. Accounting Rate of Return5. Net Cash FlowA capital budgeting methodfocused on the rate ofreturn on a project'saverage investment.6. Internal Rate of Return7. Payback PeriodThe process of restatingfuture cash flows in terms8. Hurdle Rateof present time value.Cash inflows minus cashoutflows for the period.A process of analyzingalternative long-terminvestments.>

Answer: 1. Discounting The process of restating future cash flows in terms of present time value.…

Answered: 2. Match each of the following terms…

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2. Match each of the following terms with the appropriate definition.

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section: Chapter Questions

Problem 1Q: Define each of the following terms: Capital budgeting; payback period; discounted payback...

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Question

2. Match each of the following terms with the appropriate definition.
The time expected to
recover the cash initially
invested in a project.
A minimum acceptable rate
of return on a potential
investment.
1. Discounting
A return on investment
which results in a zero net
present value.
2. Net Present Value
A comparison of the cost of
3. Capital Budgeting
an investment to its
projected cash flows at a
single point in time.
4. Accounting Rate of Return
5. Net Cash Flow
A capital budgeting method
focused on the rate of
return on a project's
average investment.
6. Internal Rate of Return
7. Payback Period
The process of restating
future cash flows in terms
8. Hurdle Rate
of present time value.
Cash inflows minus cash
outflows for the period.
A process of analyzing
alternative long-term
investments.
>

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