A sophisticated capital budgeting technique that can be computed by solving for the discount rate that equates the present value of a projects inflows with the present value of its outflows is called net present value.

Question

Quizplus · Accepted Answer

The technique described is called the Internal Rate of Return (IRR), not Net Present Value (NPV). NPV calculates the difference between the present value of inflows and outflows, while IRR finds the discount rate that makes them equal.

A Sophisticated Capital Budgeting Technique That Can Be Computed by Solving