What provides an absolute dollar measure?

Question

Quizplus · Accepted Answer

The net present value provides an absolute dollar measure as it calculates the present value of all cash inflows minus the present value of all cash outflows, taking into account the time value of money. The other options (payback period, internal rate of return, and accounting rate of return) do not provide an absolute dollar measure. The payback period only indicates how long it takes to recoup the initial investment, the internal rate of return provides a percentage rate of return, and the accounting rate of return (also known as the average accounting return) calculates an average percentage of profit based on accounting net income and initial investment.

What Provides an Absolute Dollar Measure