Ahorro, Jose Ramon R.

11846948
FINAMGT OTE002 - Capital Budgeting Concepts
Jul 13, 2021

Exercise 1
A. Net present value
B. Capital budgeting
C. Mutually exclusive projects
D. Time value of money
E. Discounted payback period
F. Payback reciprocal
G. Relevant Cash flows
H. Internal rate of return
I. Net investment
J. Independent projects
K. Tentative payback period
L. Expected net present value
M. Accounting rate of return

Exercise 7
A. False
B. False
C. False
D. True
E. True
F. False
G. False
H. False
I. True
J. True

Exercise 9
An investment of PHP50,000 is expected to bring in annual cash returns of
PHP12,500. Economic life is 5 years. Estimate internal rate of return.

➔ Internal rate of return = 7.931% or 7.93%