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Match the Following Definitions with the Appropriate Term

Question 190

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Match the following definitions with the appropriate term

Premises:
Equals the discount rate that results in a net present value of zero.
Cash inflows minus cash outflows for the period.
A minimum acceptable rate of return.
The time expected to pass before the net cash flows from an investment equals its initial cost.
Annual after-tax net income divided by annual average investment.
A process of analyzing alternative long-term investments and deciding which assets to acquire or sell.
Initial cost of an investment subtracted from discounted future cash flows from the investment.
Responses:
Internal Rate of Return
Hurdle Rate
Accounting Rate of Return
Net Cash Flow
Capital Budgeting
Payback Period
Net Present Value

Correct Answer:

Equals the discount rate that results in a net present value of zero.
Cash inflows minus cash outflows for the period.
A minimum acceptable rate of return.
The time expected to pass before the net cash flows from an investment equals its initial cost.
Annual after-tax net income divided by annual average investment.
A process of analyzing alternative long-term investments and deciding which assets to acquire or sell.
Initial cost of an investment subtracted from discounted future cash flows from the investment.
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