Quiz Ch 05 – Characteristics of the Discounted Payback Period Measure
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Which statement accurately describes the discounted payback period measure?
Which statement accurately describes the discounted payback period measure?
What is the definition of the Internal Rate of Return (IRR)?
What is the term for the process of determining the present value of future cash flows?
Which is NOT a disadvantage of the payback rule?
How can the present value of a future amount be increased?
Which is NOT considered a shortcoming of the Internal Rate of Return (IRR) method?
What is another name for the Internal Rate of Return (IRR) method?
What is the term used to describe the interest earned on both the initial principal and the interest reinvested from prior periods?
Jared invested $100 two years ago at 8 percent interest and reinvested the interest earned in the first year. In the second year, he earned an additional $8.64 in interest. What is the term used to describe the extra $.64 he earned in interest?
Which one does NOT involve the consideration of the time value of money?