Question

Capital investment evaluation methods can be grouped into the following two general categories: a.methods that use average rate of return and methods that use differential analysis methods. b.methods that do not use present values and methods that use present values. c.methods that use absorption cost analysis and methods that use incremental analysis. d.methods that do not use variable costing and methods that use variable costing.

Answer 1

Option b (methods that do not use present values and methods that use present values) is the correct choice.

Step-by-step explanation:

Evaluation of capital expenditure seems to be a budgeting technique used by businesses and government organizations to determine the possible viability of such a long-term project.

The assessment of capital investment initiatives generally follows four techniques:

• The back technique average rate.
• The system of repayment-period.
• The formula for net cash flows-value.
• The internal process of transfer.

The other options have no relation to a particular circumstance. So the above alternative seems to be the appropriate one.