Question

         Match List – I (Method in Capital Budgeting) with List – II (Characteristics) and select the correct answer using the code given below the lists:

                         List – I                                   List – II

         A. Pay Back Period       1. Discount rate that equates present values of expected cash flows

         B. Net Present Value     2. Cash provision is made to replace asset at the end of its life

         C. Internal rate of return 3. Project pays for itself in some years

4. Value of future cash inflows discounted at a rate compared with    investment

                        A         B         C

            (a)        3          2          1

            (b)        3          4          1

            (c)        4          3          2

            (d)       2          1          4