chapter 26. managerial accounting

2) The minimum acceptable rate of return on an investment, often the company's cost of capital. is called the 3) A capital budgeting method that evaluates investment decisions by measuring the expected amount of time to recover the initial investment is known as 4) The is computed by dividing a project's annual income by the average investment in it. 5) The is computed by discounting the future net cash flows from the investment at the project's required rate of return and then subtracting the initial amount invested. 6) The net present value decision rule requires that when an asset's expected cash flows are discounted at the required rate and yield a positive net present value, the project should be 7) The is the discount rate that yields a net present value of zero for an investment. 8) Projects of similar initial investments and risk levels can be compared and evaluated using NPV; however, if the initial investments differ across projects, they should be evaluated using the