The Net Present Value and the Internal Rate of Return

question 62

Multiple Choice

The net present value and the internal rate of return equations are the same,except that the IRR the equation is set to

• A)zero.
• B)one.
• C)the accounting rate of return.
• D)the lowest NPV acceptable to management.

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Definitions:

Loss on Sale

The negative financial difference between the sale price of an asset and its book value.

Note Discounted

A financial term referring to a note that is sold for less than its face value before its maturity, usually to improve liquidity.

Goods Sold

Refers to the total value or quantity of products that have been sold or exchanged for money or other value, typically within a specific timeframe.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.