Select from the List Provided the Term That Best Matches

question 99

Essay

Select from the list provided the term that best matches each of the following descriptions.

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Definitions:

Internal Rate

Short for Internal Rate of Return (IRR), a financial metric used to estimate the profitability of potential investments by calculating the rate of return at which net present value of all cash flows (both positive and negative) from a project equals zero.

Profitability Index

A capital budgeting tool that measures the ratio of the present value of future cash flows from an investment to the investment's initial cost.

Mutually Exclusive

Situations or events that cannot both occur at the same time.

Net Present Value

A financial metric that calculates the present value of all cash flows, both incoming and outgoing, of an investment.