The Discount Rate That Yields a Net Present Value of Zero

question 165

Multiple Choice

The discount rate that yields a net present value of zero for an investment is the:

• A) Net present value rate of return.
• B) Zero rate of return.
• C) Internal rate of return.
• D) Payback rate of return.
• E) Accounting rate of return.

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Definitions:

Deregulation

The reduction or elimination of government power in a particular industry, usually with the aim of creating more competition within the industry.

Monopoly

A market structure characterized by a single seller who has exclusive control over the supply and pricing of a unique product or service.

Negative Externalities

Unintended and unfavorable side effects of an economic activity that affect third parties not involved in the activity.

Majority Voting

A voting system where decisions are made based on the preference of more than half of the votes cast, commonly used in elections and organizational decision-making.