Twenty-Five-Year-Old Heather Was Overweight

question 142

Multiple Choice

Twenty-five-year-old Heather was overweight. After going on a diet, she successfully lost 15 pounds. If Heather is typical of most people who lose weight, she will:

• A) maintain her new weight until she reaches her late thirties or early forties.
• B) probably lose an additional 5 to 8 pounds over the next year.
• C) regain the weight she lost in a matter of weeks or months.
• D) have a body mass index of 20 or less and maintain that level indefinitely.

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Definitions:

Modified Internal Rate

A version of the internal rate of return (IRR) adjusted for scale and risk, providing a more accurate reflection of an investment's profitability.

Cost of Capital

The critical rate of return a firm is required to earn on investment projects to hold its market stance and entice financiers.

NPV Method

Net Present Value method, a financial analysis tool used to determine the value of an investment by discounting future cash flows to their present value.

IRR Method

The IRR method, or Internal Rate of Return method, is a financial analysis tool used to evaluate the profitability of an investment by calculating the interest rate at which net present value of all the cash flows (both positive and negative) from a project or investment equals zero.