The Internal Rate of Return for a Proposed Investment Can

question 6

Multiple Choice

The internal rate of return for a proposed investment can be calculated:

• A) if the cash flow table is identical to future values of a series of cash flows.
• B) if the future value of a series of cash flows can be arrived at by the annuity accumulation factor.
• C) by finding a discount rate that yields a zero net present value for a proposed investment.
• D) by finding a discount rate that yields a positive net present value for a proposed investment.

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Definitions:

Projected Sales

Estimated revenue figures based on market analysis and sales patterns, used for business planning and forecasting.

Depreciation

The systematic allocation of the cost of a tangible or physical asset over its useful life, recognizing it as an expense.

Tax Rate

The fiscal percentage deducted as tax from an individual's or corporation's income.