Imagine You Lost Your Keys

question 31

True/False

Imagine you lost your keys. You begin searching all of the places you have gone to since losing your keys, starting with the last place and working your way towards the first place. This is an example of a means-ends strategy.

---

Definitions:

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Net Present Value (NPV)

The variance between the current value of incoming cash and the current value of outgoing cash throughout a specific duration.

Internal Rate of Return (IRR)

The discount rate that makes the net present value (NPV) of all cash flows from a particular project zero.

Net Present Value (NPV)

A calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate, to determine the project’s profitability.