The Discount Rate That Makes the Net Present Value of an Investment

question 37

Multiple Choice

The discount rate that makes the net present value of an investment exactly equal to zero is called the

• A)profitable rate of return.
• B)internal rate of return.
• C)average accounting return.
• D)profitability index.
• E)risk-free rate.

Understand the impact of variable interest rates on the total interest accrued.

Apply concepts of simple interest and maturity value to real-life financial planning and decision-making.

Compare financial alternatives to make informed decisions regarding investments and purchases.

Calculate and understand the effects of deferred payments and surcharges on annual interest rates.

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