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Use Figure 20.3 to answer the following questions. The DNA profiles below represent four different individuals.
Figure 20.3
-Which of the following statements is most likely True?
Internal Rate of Return
The interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.
Net Present Value
A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.
Discount Rate
The interest rate used to discount future cash flows to their present value, often reflecting the risk or cost of capital.
Payback Period
The amount of time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment.
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