Which of the Following Methods of Evaluating Investment Projects Can

question 36

Multiple Choice

Which of the following methods of evaluating investment projects can properly evaluate projects of unequal lives?

• A) The net present value.
• B) The payback.
• C) The internal rate of return.
• D) The equivalent annual annuity.

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Definitions:

Expected Return

It is the anticipated return on an investment, considering all possible outcomes and their probabilities.

Expected Return

The forecasted percentage return on an investment, accounting for all possible returns and their probabilities.

Currently Available Information

The latest and most up-to-date data or facts that are accessible and can be used for decision-making processes.

SML

Security Market Line, a graphical representation of the expected return of investments as a function of their risk, as measured by beta.