
Concept explainers
(a)
Net present value method is the method which is used to compare the initial
The net present value of the project.
(b)
To explain: The rate of return based on the analysis.
(c)
Internal rate of return method is one of the capital investment methods which determine the rate of return, wherein the net present value of all the cash flows (both positive and negative) from an investment is zero. This method is also called as the time-adjusted rate of return method. It used to evaluate the different proposal’s expected rate of return.
The internal rate of return for the given project

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Chapter 26 Solutions
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