The Difference Between the Present Value of an Investment and Its

question 5

Multiple Choice

The difference between the present value of an investment and its cost is the:

• A)net present value.
• B)internal rate of return.
• C)payback period.
• D)profitability index.
• E)discounted payback period.

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Definitions:

Credit

An accounting entry that increases liabilities or equity or decreases an asset or expense account.

Acquisition Method

An accounting procedure for recording the purchase of one company by another, focusing on fair value assessments of acquired assets and liabilities.

Subsidiary Shares

Subsidiary shares are equity shares held by a parent company in a subsidiary company, giving it ownership interest.