The Internal Rate of Return Method and the ________ Method

question 20

Multiple Choice

The internal rate of return method and the ________ method usually result in the same investment decisions.

• A) payback period
• B) accounting rate of return
• C) net present value
• D) return on investment

---

Definitions:

Amortization

The gradual reduction of a debt over a period of time through regular payments that cover principal and interest.

Semiannually

Occurring twice a year or every six months.

Interest Payments

The amount of money paid regularly (typically annually or semiannually) for the use of borrowed funds.

Callable Bonds

Bonds that can be redeemed by the issuer prior to their maturity date at a specified call price.