Asked by
Janelle Wilson
on Nov 08, 2024
Verified
A project has a required return of 15% and a five year life. Which of the following is inconsistent with the other four?
A) The discounted payback is five years
B) PI = 0
C) NPV = $0
D) IRR = 15%
E) The present value of the future cash flows equals the initial outlay
Required Return
The minimum profit or yield that investors expect or require from an investment to make it worthwhile.
Net Present Value
An economic measure that determines the disparity between the current value of cash coming in and the current value of cash going out over a specific timeframe.
Internal Rate Of Return
The break-even discount rate at which a project's cash flows net present value is zero.
- Scrutinize the notion and computation methods of net present value, underlining its essential role in investment strategy formulation.
Verified Answer
JL
Learning Objectives
- Scrutinize the notion and computation methods of net present value, underlining its essential role in investment strategy formulation.