both pages are just one big question of matching term to definition. Thank you!
Company must choose which investments to pursue due to limited funds Interest rate that makes the NPV of the investment equal to zero 1. Capital budgeting Interest is earned on principle plus interest earned to date 2. Cash inflows Interest Is earned only on the principal amount 3. Cash outflows Means decision rule is to make investment Capital rationing 5. Payback period Measures the average annual rate of return over the asset's life 6. Accounting rate of return Includes the initial investment in the equipment Time value of money The length of time it takes to recover the cost of the capital outlay through net cash inflows 8. Compound interest 9. Net present value Causes cash received sooner in time to be worth more than cash flows received later in time because money earns income over time 10. Discount rate Minimum rate that an investment must earn in order to be acceptable Investment with a positive net present 11. value 3. Cash OutOWS Means decision rule is to make investment 4. Capital rationing 5. Payback period Measures the average annual rate of return over the asset's life Accounting rate of return Includes the initial investment in the equipment 7 Time value of money The length of time it takes to recover the cost of the capital outlay through net cash inflows 8. Compound interest 9. Net present value Causes cash received sooner in time to be worth more than cash flows received later in time because money earns income over time 10. Discount rate Minimum rate that an investment must earn in order to be acceptable Investment with a positive net present 11. value 12. Internal rate of return The difference between the present value of the investment's net cash inflows and the cost of the initial investment 13. Simple interest Process of deciding whether to invest in new equipment, new vehicles or new technology Future cash revenue generated, any future savings in operating costs and any future residual value