For net present value calculations, the rate of return that one could earn by investing in another project with similar risk is known as the:

Question

Quizplus · Accepted Answer

The opportunity cost of capital is the rate of return that could be earned by investing in another project with similar risk, making it the best choice for this question. The real interest rate is the nominal interest rate adjusted for inflation, while the nominal interest rate is the stated interest rate without inflation adjustments. The prime interest rate is the rate that banks charge their most creditworthy customers.

For Net Present Value Calculations, the Rate of Return That