Which one of the following methods predicts the amount by which the market value of a firm will change if a project is accepted? Multiple Choice Internal rate of return Payback Net present value Profitability index Discounted payback

Which one of the following methods predicts the amount by which the market value of a firm will change if a project is accepted? Multiple Choice Internal rate of return Payback Net present value Profitability index Discounted payback

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter14: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 8LTAI

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Question

Which one of the following methods predicts the amount by which the market value of a firm will change if a project is accepted?

Multiple Choice

Internal rate of return
Payback
Net present value
Profitability index
Discounted payback

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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