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INSTRUCTIONS: Choose the Word or Phrase in [ ] Which

question 41

Multiple Choice

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.
-You are borrowing $5,000 at 9%.You may choose a 24 or 36 month repayment plan.Monthly payments will be higher with the [24 | 36] month plan.


Definitions:

Internal Rate of Return (IRR)

A method of calculating an investment's rate of return that makes the net present value of all cash flows equal to zero.

Mutually Exclusive Investments

Mutually exclusive investments are investment options where the choice of one alternative precludes the selection of another, requiring a careful comparison to choose the best option.

Capital Rationing

Occurs when investors or management place a constraint on the size of the firm’s capital budget during a particular period.

Accounting Rate of Return

A financial ratio that measures the profitability of an investment by dividing the average annual profit by the initial investment cost.

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