Question
[11] Which one of these methods uses accounting values rather than financial values? [A] AAR [B] IRR [C] NPV [12] An investment should be accepted
[11] Which one of these methods uses accounting values rather than financial values? [A] AAR [B] IRR [C] NPV [12] An investment should be accepted if the NPV is positive and rejected if it is negative. [A] True [B] False [13] The length of time required for an investment to generate cash flows sufficient to recover the initial cost of the investment is called the: [A] net present value. [B] payback period. [C] internal rate of return. [14] An investment is acceptable if its average accounting return (AAR): [A] exceeds the target AAR. [B] is less than the target AAR. [15] The discount rate that makes the net present value of an investment exactly equal to zero is called the internal rate of return. [A] True [B] False
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