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.

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Definitions:

Serious Bargaining

The process of negotiating terms and conditions in a committed and earnest manner.

Tangible Assets

Physical items or properties owned by a person or company that have value, such as land, buildings, and equipment.

Intangible Assets

Non-physical assets that have value due to the legal rights or competitive advantages they provide, such as trademarks, patents, and copyrights.

Family Business

A commercial organization in which decision-making is influenced by multiple generations of a family related by blood or marriage.