Which of the Following Is True of Discounted Cash Flow

question 48

Multiple Choice

Which of the following is true of discounted cash flow methods like NPV and IRR?

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

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Definitions:

Values

A consumer’s belief that specific behaviors are socially or personally preferable to other behaviors.

Socially Preferable

The characterization of products, practices, or behaviors that are considered favorable or advantageous by society based on ethical, cultural, or social norms.

Behavior

The actions, reactions, or functioning of an individual, group, or system in response to external or internal stimuli.

U.S. Government

The federal government of the United States, consisting of three branches: executive, legislative, and judicial, established to govern the country.