The Discount Rate That Makes the Net Present Value of Investment

question 158

Multiple Choice

The discount rate that makes the net present value of investment exactly equal to zero is the:

• A) Payback period.
• B) Internal rate of return.
• C) Average accounting return.
• D) Profitability index.
• E) Discounted payback period.

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Definitions:

Apparent Agency

A situation in which a principal creates a reasonable impression that an agent has authority to act on their behalf.

Implied Authority

Power granted by custom or implied by the conduct of a role, allowing an agent to perform acts that are reasonably necessary to accomplish tasks.

Right of Reimbursement

The legal right to be repaid or compensated for expenses, losses, or liabilities incurred on behalf of another party or as a result of another's actions.

Preponderance of the Evidence

A standard of proof in civil cases, requiring that a party's evidence is more convincing than the opponent's evidence to win the case.