Which of the following does not use interest expense as a component of amounts in its computations?
A)Net present value using tables
B)Internal rate of return
C)Required rate of return
D)Net present value using Excel

Question

Quizplus · Accepted Answer

The required rate of return is a concept that represents the minimum return an investor expects to achieve by investing in a project or asset. It does not directly use interest expense in its computation. Instead, it considers the risk level, inflation expectations, and the returns available from other investments. In contrast, net present value (both using tables and Excel) and internal rate of return calculations involve interest expense as they are concerned with the present value of future cash flows, which are discounted using an interest rate or return rate.

Which of the Following Does Not Use Interest Expense as a Component