Both the "net present value" and the "internal rate of return" methods of evaluating capital investments consider the time value of money.

Question

Quizplus · Accepted Answer

Both the net present value (NPV) and internal rate of return (IRR) methods of evaluating capital investments take into account the time value of money. NPV discounts future cash flows and compares them to the initial investment, while IRR calculates the discount rate that makes the present value of the expected cash inflows equal to the initial investment.

Both the "Net Present Value" and the "Internal Rate of Return