The calculation that expresses the ratio of net cash inflows to net cash outflows produced by a financial contract is known as:
A)net present value.
B)net profit.
C)internal rate of return.
D)rate of return.

Question

Quizplus · Accepted Answer

The calculation that expresses the ratio of net cash inflows to net cash outflows produced by a financial contract is known as the rate of return. Net present value and internal rate of return are related to the evaluation of the profitability of the investment, but do not directly express the ratio of cash inflows to outflows. Net profit is a measure of the overall profitability of a company or venture, not just a specific financial contract.

The Calculation That Expresses the Ratio of Net Cash Inflows