The ___________________capital budgeting method calculates the discount rate at which the present value of expected cash inflows from a project equals the present value of expected cash outflows.

Question

Quizplus · Accepted Answer

The Internal Rate of Return (IRR) method calculates the discount rate at which the present value of expected cash inflows from a project equals the present value of expected cash outflows. Therefore, this method fits the description provided in the question. The other options (payback method, accrual accounting rate-of-return method, net present value method) do not involve calculating the discount rate to determine the present value of expected cash inflows and outflows.

The ___________________Capital Budgeting Method Calculates the Discount Rate at Which