Investment Methods,such as Net Present Value and Internal Rate of Return,________

question 70

Multiple Choice

Investment methods,such as net present value and internal rate of return,________.

• A) use simple interest calculations
• B) use net income amounts rather than cash flows
• C) focus on the payback period
• D) consider discounted cash flows

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Definitions:

Future Value

The future value of an asset or cash that, on a specific future date, is equal in worth to a given amount today.

Cash Flow

The total financial movement entering and exiting a business, substantially affecting its operational liquidity.

Present Value

The current value of a future amount of money or a series of future payments, discounted at a specific rate.

Future Value

The value of an asset or cash at a specific date in the future that is equivalent in value to a specified sum today.