The Rate That Yields a Net Present Value of Zero

question 31

Multiple Choice

The rate that yields a net present value of zero for an investment is the:

• A) Internal rate of return.
• B) Accounting rate of return.
• C) Net present value rate of return.
• D) Zero rate of return.
• E) Payback rate of return.

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Definitions:

Finished Products

Items or goods that have completed all stages of production and are ready for sale to customers.

Time Period

A specific duration or interval during which certain events occur or conditions are measured.

Selling and Administrative Expenses

Expenses related to the daily operations of a business that are not directly tied to production, including sales promotions, salaries of administrative staff, and office rent.

Days' Sales

A measure often used in the context of 'Days' Sales in Inventory' which indicates the average number of days it takes for a company to sell its inventory.