![]() The length of time needed to recover the initial investment once time value of money is considered is called the: Discounted payback period. A conventional cash flow is defined as a series of cash flows where: Only the initial cash flow is negative. The present value created per dollar invested is called the: Profitability index. Other project, the project is said to be: Independent. When the decision to accept or reject one project does not affect the decision to accept or reject any By definition, the net present value is equal to zero when the discount rate is equal to the: Internal rate of return. ![]() Average accounting return is defined as: Average net income divided by average book value The discounted payback period is best defined as the length of time until the: Sum of the discounted cash flows is equal to the initial investment. Value and its cost is positive and rejected if the difference is negative is referred to as the: Net present value rule. The principle that an investment should be accepted if the difference between the investment's market Net present value can be defined as A measure of the value created or added today by undertaking a project The crossover point is defined as the discount rate that: Makes the net present values of two projects equal. The profitability index (PI) rule can be best stated as: An investment is acceptable if its PI is greater than one. The present value of an investment's future cash flows divided by its initial cost is the: Profitability index. multiple rates of return A situation in which taking one investment prevents the taking of another is called: Mutually exclusive investment decisions. The possibility that more than one discount rate will make the NPV of an investment zero is called the IRR The internal rate of return (IRR) rule can be best stated as: An investment is acceptable if its IRR exceeds the required return, or else it should be rejected. Complete the following decision rule: A project should be accepted if its _ exceeds the firm's
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