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

question 83

Multiple Choice

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

• A)external rate of return.
• B)internal rate of return.
• C)average accounting return.
• D)profitability index.
• E)equalizer.

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Definitions:

Grams

A unit of mass in the metric system, equal to one-thousandth of a kilogram.

Tablespoon

A unit of measure used in cooking, equal to approximately 15 milliliters or half an ounce.

Abbreviation

A condensed version of a word or phrase, utilized to conserve space or prevent redundancy.

Equivalent Measure

A unit of measurement that corresponds to equivalent amounts in different measurement systems.