The Net Present Value Method Differs from the Internal Rate

question 34

Multiple Choice

The net present value method differs from the internal rate of return method in that:

• A)the net present value method discounts cash flows using the risk-free rate of return and the internal rate of return method does not.
• B)the internal rate of return method finds the rate of return that results in a zero net present value.
• C)both methods yield similar conclusions for mutually exclusive projects.
• D)the net present value method discounts cash flows by the required rate of return,whereas the internal rate of return method does not take into account the time value of money.

---

Definitions:

Pie Chart

A circular statistical graphic, which is divided into slices to illustrate numerical proportion.

Company Sales

The total revenue generated from the sale of products or services by a company within a specific period.

Line Chart

A type of chart or graph that displays information as a series of data points connected by straight line segments.

Horizontal Bars

Horizontal bars in computing often refer to graphical user interface elements, such as progress bars or navigation menus, that extend horizontally across the screen.