______ is a measure of how much value is created or added today by undertaking an investment. Multiple choice question. The internal rate of return The profitability index Net present value Average accounting return

______ is a measure of how much value is created or added today by undertaking an investment. Multiple choice question. The internal rate of return The profitability index Net present value Average accounting return

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 12MC: Which of the following does nor assign a value to a business opportunity using time-value...

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Question

______ is a measure of how much value is created or added today by undertaking an investment.

Multiple choice question.

The internal rate of return

The profitability index

Net present value

Average accounting return

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

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