What is the purpose of investment appraisal?
Investment Appraisal

Quiz
•
Business
•
12th Grade
•
Medium
undefined Gayle
Used 24+ times
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20 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
To assess the profitability of a capital investment project
To evaluate the best alternative within a given context
To calculate the payback period of an investment
To determine the average rate of return on an investment
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why is investment appraisal important for a business?
It helps the business assess alternative investment options
It allows the business to make long-term decisions
It considers both qualitative and quantitative factors
All of the above
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What are some reasons why a firm may wish to use investment appraisal?
To assess all available alternatives
To consider qualitative and quantitative factors
To make decisions that are best for the long run
All of the above
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which investment appraisal method calculates the length of time required to recover the original investment?
Payback period
Average rate of return
Net Present Value
None of the above
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the advantage of using the payback period method?
It focuses on short-term profitability
It considers the timing of cash flows
It is easy to calculate
All of the above
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which investment appraisal method calculates the annual return on an investment without considering the time value of money?
Payback period
Average rate of return
Net Present Value
None of the above
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does the Net Present Value (NPV) method take into account?
The profitability of an investment
The time value of money
The discount rate
All of the above
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