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Imagine that a young child is presented with a novel word, "encyclopedia," when her grandmother says, "Oh, look at the encyclopedia." In front of the child are two objects, a bright pink-covered book-"book" is a word the child already knows-and a green onion, an object the child has never seen before. The child is MOST likely to make the assumption that the novel word refers to the
Required Rate of Return
The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.
Internal Rate of Return
A financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.
Cash Flows
The net amount of cash and cash equivalents being transferred into and out of a business.
Accrual Income
This refers to the income that is earned in a fiscal period but not received within the same period.
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