Under the NPV method, the rate of return required to satisfy the firm's investors is
A) the cost of capital.
B) its opportunity cost.
C) the internal rate of return.
D) the accounting return on investment.

Question

Quizplus · Accepted Answer

The NPV method takes into account the cost of capital, which represents the rate of return required by the firm's investors to compensate them for the use of their funds. Therefore, the rate of return required to satisfy the firm's investors is the cost of capital.

Under the NPV Method, the Rate of Return Required to Satisfy