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no data is needed just write the understanding. What do you understand by the following sentence? Net Present Value is analogous to an initial balance

image text in transcribedno data is needed just write the understanding.

What do you understand by the following sentence? "Net Present Value is analogous to an initial balance in a hypothetical bank account; Internal Rate of Return is analogous to the compound interest rate on that account." Within this analogy, what would the negative cash flows (the costs) and the positive cash flows (from revenue) correspond to in terms of the hypothetical bank account? What would be the analogy for Salvage Value (or Clean-up Cost)? What do you understand by the following sentence? "Net Present Value is analogous to an initial balance in a hypothetical bank account; Internal Rate of Return is analogous to the compound interest rate on that account." Within this analogy, what would the negative cash flows (the costs) and the positive cash flows (from revenue) correspond to in terms of the hypothetical bank account? What would be the analogy for Salvage Value (or Clean-up Cost)

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