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. The IRR is the discount rate that makes the net present value of an investment equal to zero. In other words, it is the rate of return that the investment will earn over its lifetime. The higher the IRR, the more attractive the investment is.

Which Method of Evaluating Capital Investment Proposals Uses the Concept