The Capital Budgeting Method That Calculates the Discount Rate at Which

question 12

Multiple Choice

The capital budgeting method that calculates the discount rate at which the present value of expected cash inflows from a project equals the present value of expected cash outflows is the ________.

• A) net present value method
• B) accrual accounting rate-of-return method
• C) payback method
• D) internal rate of return method

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Definitions:

Capital Account

A national account that shows the net change in asset ownership for a nation, including assets in foreign investments and movements of capital.

Trade Deficit

A situation where a country's imports exceed its exports in value.

Debts Owed

Financial obligations or liabilities that a person or entity is required to repay to creditors.

Capital Account

A national account that records transactions involving the acquisition and disposal of assets, such as direct investments, portfolio investments, and financial derivatives between residents and non-residents.