The internal rate of return method and the ________ method usually result in the same investment decisions.
A) payback period
B) accounting rate of return
C) net present value
D) return on investment

Question

Quizplus · Accepted Answer

The internal rate of return method and the net present value method both incorporate the time value of money and are based on calculating the present value of future cash flows. Therefore, they usually result in the same investment decisions. The payback period method and the accounting rate of return method do not account for the time value of money and may not result in the same investment decisions as the other two methods. Return on investment is a general term that can refer to various methods used to evaluate the profitability of an investment.

The Internal Rate of Return Method and the ________ Method