Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return?

Question

Quizplus · Accepted Answer

The method that uses the concept of present value to compute a rate of return is the Internal Rate of Return (IRR) method. This method calculates the discount rate at which the net present value (NPV) of the investment equals zero. The higher the IRR compared to the required rate of return, the more attractive the investment. Therefore, D is the best choice.

Which Method of Evaluating Capital Investment Proposals Uses the Concept