Which of the following is the rate of return,based on discounted cash flows,a company can expect to earn by investing in a capital asset?

Question

Quizplus · Accepted Answer

The rate of return based on discounted cash flows that a company can expect to earn by investing in a capital asset is called the internal rate of return (IRR). Option A, accounting rate of return, is based on accounting profit and does not take into account the time value of money. Option B, bank interest rate, is the rate at which a bank pays interest to its depositors and is not relevant to capital investment decisions. Option D, return on investment, is a general term that does not specifically refer to the rate of return based on discounted cash flows.

Which of the Following Is the Rate of Return,based on Discounted