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Match the Term on the Left to Its Corresponding Function

question 20

Multiple Choice

Match the term on the left to its corresponding function on the right.
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Definitions:

IRR

An investment's IRR represents the discount rate that makes the sum of all future cash flows (positive and negative) from the investment equal to zero, effectively measuring its annual growth rate.

NPV

Net Present Value; the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Payback

The length of time it takes for an investment to generate an amount of money equal to the cost of the investment, used as a basic measure of the investment's risk.

Discounted Payback

The period of time it takes for an investment’s cash flows, discounted at a particular rate, to cover its initial cost.

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