The _____ of an Investment Makes the Net Present Value

question 81

Multiple Choice

The _____ of an investment makes the net present value of all cash flows (benefits and costs) generated by a project equal to zero.

• A) net present value
• B) internal rate of return
• C) earnings growth
• D) market share

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Definitions:

Effective Yield

Effective yield is the total yield on an investment, taking into account the effects of compounding interest or reinvestment over a given period.

Maturity Date

The date on which a financial obligation must be repaid in full.

Present Discounted Value

The present worth of a future amount of money or series of cash inflows, discounted at a given rate of return.

Interest Rate

The cost of borrowing money or the payment made for the use of money, typically expressed as a percentage of the principal amount annually.