Which of the Following Is the Rate of Return, Based

question 25

Multiple Choice

Which of the following is the rate of return, based on discounted cash flows, that a company can expect to earn by investing in a capital asset?

• A)accounting rate of return (ARR)
• B)bank interest rate
• C)internal rate of return (IRR)
• D)return on investment

---

Definitions:

Tax Benefit

A tax policy that allows certain deductions, credits, or exclusions that ultimately reduce a taxpayer's burden, improving financial efficiency.

Operating Loss Carryforward

A tax provision that allows businesses to apply current year's operating losses to future profits for tax relief.

Taxable Income

Income of an individual or corporation subject to tax by governmental authorities.

Financial Income

Income generated through investments or other financial instruments, distinct from operational or business income.