In capital budgeting, the four key elements that are taken into consideration when calculating the IRR are the cash outflow, the cash inflows, the expected life of the asset and the simple interest tables.

Question

Quizplus · Accepted Answer

In capital budgeting, the four key elements considered when calculating the Internal Rate of Return (IRR) are the initial investment (cash outflow), the series of cash inflows, the expected life of the investment, and the net present value (NPV), not simple interest tables. Simple interest tables are not used in IRR calculations; instead, IRR is found when NPV equals zero.

In Capital Budgeting, the Four Key Elements That Are Taken