What Is the Rate at Which the Net Present Value

question 29

Multiple Choice

What is the rate at which the net present value of an investment equals zero?

• A) Internal rate of return (IRR)
• B) Return on investment (ROI)
• C) Cash flow analysis
• D) Break-even analysis

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Definitions:

Direct Method

A financial accounting method that allocates service department costs directly to producing departments without intermediate allocations.

Sales Revenue

The overall sum of money made from selling products or services before deducting any costs.

Direct Method

A cash flow statement preparation approach that enumerates major classes of gross cash receipts and payments.

Beginning Balance

The amount of money or value available in an account at the start of a new financial period.