Which One of the Following Capital-Budgeting Evaluation Techniques Is Based

question 132

Multiple Choice

Which one of the following capital-budgeting evaluation techniques is based on finding a discount rate which causes the net present value to be zero?

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

---

Definitions:

Expected Interest Rate

The anticipation of the rate at which money will be charged for the use of money in future transactions, often guided by current economic conditions and monetary policy.

Algebraic Expression

An algebraic expression is a mathematical phrase that can contain ordinary numbers, variables (like x or y), and operators (like add, subtract, multiply, and divide).

Interest Rate

An annual percentage reflecting the amount of a loan that is applied as interest to the borrower, calculated on the total loan amount outstanding.

Retirement

The act of leaving one's job and ceasing to work, typically due to age or health reasons.