The Rate of Interest Actually Paid or Earned,also Called the Annual

question 83

Multiple Choice

The rate of interest actually paid or earned,also called the annual percentage rate (APR) ,is the ________ interest rate.

• A)effective.
• B)nominal.
• C)discounted.
• D)continuous.

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Definitions:

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment, ignoring the time value of money.

MIRRs

Modified Internal Rate of Return (MIRR) is a financial metric used to assess the profitability of investments, adjusting the internal rate of return (IRR) to account for differences in the reinvestment rate and financing costs.

IRRs

Internal Rate of Return; a financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows equal to zero.

Mutually Exclusive

A condition in which two or more propositions cannot both be true at the same time, often applied in scenarios of project selection or decision making.