The NPV and IRR Derived from Estimated Cash Flows for a Capital

question 81

Multiple Choice

The NPV and IRR derived from estimated cash flows for a capital budgeting project are:

• A)essentially expected values or means.
• B)likely to differ from the actual results of the project.
• C)random variables with their own probability distributions.
• D)All of the above

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Definitions:

Effective Annual

Referring to an interest rate or return on investment that accounts for the effects of compounding over a year.

Rate of Sales Growth

The increase in sales over a specific period of time, typically measured as a percentage.

Per Month

A term indicating a frequency or rate that applies to each month.

Each Quarter

A period of three months used in financial and business reporting.