The Discount Rate Used in a Net Present Value Analysis

question 149

Multiple Choice

The discount rate used in a net present value analysis is the ________.

• A) rate of inflation
• B) rate of interest earned on a savings account
• C) required rate of return or the hurdle rate
• D) rate of interest charged for debt financing of an investment

---

Definitions:

Equilibrium

A state of balance or stability within a system, achieved through the equal action of opposing forces.

Gestalt Law

Principles of the Gestalt psychology movement that describe how humans naturally organize visual elements into whole objects rather than perceiving the parts separately.

Similarity

The state or fact of being alike or having common features or attributes.

Gestalt Law

Psychological principles that describe how humans tend to organize visual elements into groups or unified wholes.