Asked by
Jizreel Jeudy
on Dec 09, 2024
Verified
Complete the following decision rule: A project should be accepted if its ______ exceeds the firm's required rate of return.
A) IRR
B) NPV
C) payback
D) discounted payback
E) AAR
Required Rate Of Return
The minimum annual percentage earnings needed from an investment to make it worthwhile, factoring in risk.
IRR
An investment's IRR represents the discount rate that makes the sum of all future cash flows (positive and negative) from the investment equal to zero, effectively measuring its annual growth rate.
NPV
Net Present Value; the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
- Comprehend and implement the principle of internal rate of return (IRR) and its regulation for making investment choices.
- Explore the concept and numerical analysis of net present value and its impact on the selection of investments.
Verified Answer
MF
Learning Objectives
- Comprehend and implement the principle of internal rate of return (IRR) and its regulation for making investment choices.
- Explore the concept and numerical analysis of net present value and its impact on the selection of investments.