Answered: If cashflows are discounted @ the…

If cashflows are discounted @ the net present value is zero. O a. RATE OF BORROWING O b. COST OF EQUITY O c. IRR O d. MIRR

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 5MC

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Question

If cashflows are discounted @

the net present value is

zero.

O a. RATE OF BORROWING

O b. COST OF EQUITY

O c. IRR

O d. MIRR

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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