Asked by Pyper Mortenson on May 07, 2024
Verified
Which of the following is a method of analyzing capital investment proposals that ignores present value?
A) internal rate of return
B) net present value
C) discounted cash flow
D) average rate of return
Average Rate of Return
A financial metric used to estimate the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.
Internal Rate of Return
The discount rate that makes the net present value (NPV) of all cash flows from an investment equal to zero.
Net Present Value
A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time.
- Recognize the techniques in capital investment evaluation that consider or overlook present value.
Verified Answer
Learning Objectives
- Recognize the techniques in capital investment evaluation that consider or overlook present value.
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