The Method That Calculates the Ratio of the Present Value

question 77

Multiple Choice

The method that calculates the ratio of the present value of the positive cash flows of a project to the absolute value of the present value of the negative cash flows is called the:

• A)internal rate of return
• B)profitability index
• C)net present value
• D)payback period

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Definitions:

Price

The sum in money expected, obligated, or dispensed as compensation for something.

Demand Curve

A chart that illustrates the connection between a product's price and the amount of the product buyers are prepared to buy.

Change In Income

The difference in an individual's or household's income over a specific period, indicating an increase or decrease.

Demand

The desire for a particular product or service combined with the ability and willingness to pay for it.