The following are 10 technical accounting terms introduced or emphasized in this chapter. Net present value Capital budgeting Incremental analysis Discount rate Payback period Present value Sunk cost Salvage value Return on average investment Capital budget audit Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None" if the statement does not cor- rectly describe any of the terms.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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26.1 (d, e, f)
3,
The following are 10 technical accounting terms introduced or emphasized in this chapter.
Net present value
Capital budgeting
Incremental analysis
Discount rate
Payback period
Present value
gy
Sunk cost
Salvage value
Return on average investment
Capital budget audit
Each of the following statements may (or may not) describe one of these technical terms. For each
statement, indicate the accounting term described, or answer "None" if the statement does not cor-
rectly describe any of the terms.
Transcribed Image Text:3, The following are 10 technical accounting terms introduced or emphasized in this chapter. Net present value Capital budgeting Incremental analysis Discount rate Payback period Present value gy Sunk cost Salvage value Return on average investment Capital budget audit Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer "None" if the statement does not cor- rectly describe any of the terms.
d. The average annual net income from an investment expressed as a percentage of the average
amount invested.
The length of time necessary to recover the entire cost of an investment from resulting annual
net cash flows.
e.
f. The present value of an investment's expected future cash flows.
Transcribed Image Text:d. The average annual net income from an investment expressed as a percentage of the average amount invested. The length of time necessary to recover the entire cost of an investment from resulting annual net cash flows. e. f. The present value of an investment's expected future cash flows.
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