BEC M9- Financial Decisions Models: Part 2

Question 1

————method determines the present value factor (& related interest rate) that yields an NPV equal to zero.

Answer 1

Internal Rate of Return(IRR)

Only projects with an IRR greater than the hurdle rate should be accepted.

Question 2

The ——- method calculates the time it will take to recover the initial investment disregarding the time value of money.

Answer 2

Payback Period