Which of the Following Calculates the Net Present Value of an Investment,given

question 18

Multiple Choice

Which of the following calculates the net present value of an investment,given a fixed discount rate?

• A)PV
• B)FV
• C)NPV
• D)IPMT

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Definitions:

Return

The gain or loss made on an investment over a specified period, typically expressed as a percentage of the investment’s initial cost.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively a company uses investments to generate earnings growth.

Dividend Growth Rate

The annual percentage rate at which a company's dividend payments to shareholders increase.

Plowing Back

Refers to the strategy of reinvesting profits back into the business instead of distributing them as dividends.