Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return?

Question

Quizplus · Accepted Answer

The Internal rate of return (IRR) method uses the concept of present value to compute the rate of return on an investment proposal. The IRR is the discount rate that makes the present value of cash inflows equal to the present value of cash outflows. It is a more accurate method for evaluating capital investment proposals than the accounting rate of return, average rate of return, or cash payback period as it considers the time value of money.

Which Method of Evaluating Capital Investment Proposals Uses the Concept