Match the following methods of capital budgeting with their respective formula:
|
Method |
|
Formula |
|
|
(a) |
ARR method |
(i) |
Present Value of Cash inflows - |
|
(b) |
Pay back Period Method |
(ii) |
Present Value of Cash inflow ÷ |
|
(c) |
NPV Method |
(iii) |
Average Income ÷ Average Investment |
|
d) |
Probability Index |
(iv) |
Investment ÷ Annual Cash Inflows |
Choose the correct option from those given below
1
(a) - (iii), (b) - (i), (c) - (iv), (d) - (ii)
2
(a) - (iii), (b) - (iv), (c) - (i), (d) - (ii)
3
(a) - (i), (b) - (ii), (c) - (iii), (d) - (iv)
4
(a) - (i), (b) - (iv), (c) - (ii), (d) - (iii)