The Discount Rate That Yields a Net Present Value of Zero

question 142

Multiple Choice

The discount rate that yields a net present value of zero for an investment is the:

• A)Internal rate of return.
• B)Accounting rate of return.
• C)Net present value rate of return.
• D)Zero rate of return.
• E)Payback rate of return.

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Definitions:

Antitrust Policy

Government regulations designed to promote competition and prevent monopolies and other forms of market dominance that harm consumers.

Monopoly Power

The ability of a firm to control the market price and output of a product because it is the sole supplier in a market with high barriers to entry.

Sherman Antitrust Act

A landmark federal statute passed in the late 19th century to combat anticompetitive practices, reduce market monopolies, and maintain economic competition.

Standard Oil

A former American oil producing, transporting, refining, and marketing company established by John D. Rockefeller and partners in 1870, which came to dominate the oil industry and was later broken up in 1911 due to antitrust laws.