Which one of the following capital budgeting decision methods determines a project's annual percentage rate of return?
A)modified internal rate of return
B)profitability index
C)discounted payback period
D)net present value

Question

Quizplus · Accepted Answer

The modified internal rate of return (MIRR) is a capital budgeting technique that determines a project's annual percentage rate of return. MIRR assumes that all cash flows are reinvested at the company's cost of capital, unlike the internal rate of return (IRR), which assumes reinvestment at the project's rate of return. Other options like profitability index, discounted payback period, and net present value do not determine a project's annual percentage rate of return.

Which One of the Following Capital Budgeting Decision Methods Determines