The Internal Rate of Return (IRR)and Net Present Value (NPV)methods

question 45

Multiple Choice

The internal rate of return (IRR) and net present value (NPV) methods:

• A) always give the same investment decision.
• B) never give the same investment decision.
• C) usually give the same investment decision.
• D) always give a decision different from the payback period method.

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Definitions:

Velocity of Money

The rate at which money circulates or is exchanged in an economy during a specific period.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including currency in circulation and balances held in checking and savings accounts.

Aggregate Demand

The collective appetite for goods and services in an economy, valued at a certain price point during a precise time interval.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced in a country in a given time period.