Which of the Following Investment Rules Does Not Use the Time

question 7

Multiple Choice

Which of the following investment rules does not use the time value of money concept?

• A)Net present value
• B)Internal rate of return
• C)The payback period
• D)Profitability index

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Definitions:

Inference

The process of drawing conclusions about a population based on a sample.

Parameters

Statistical or mathematical conditions and variables that define the scope and functioning of a model, equation, or procedure.

Level of Significance

A threshold in hypothesis testing that determines the probability at which the null hypothesis is rejected.

Type I Error

The incorrect rejection of a true null hypothesis, also known as a "false positive," indicating a test's incorrect indication of a significant effect.