Chap10&amp;11QuizBUS4113

# Chap10&amp;11QuizBUS4113 - Amberton University BUS 4113...

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Amberton University BUS 4113 – Accounting and Finance for Managers Chapter 10 & 11 Quiz Name: Chapter 10 1. What is the difference between the discount rate used for net present value computations and the internal rate of return? Explain your answer. For NPV computations, the discount rate serves as a minimum required rate of return. It is used as a screening tool to determine whether or not a capital investment decision meets predetermined criteria. If the net present value of an investment is positive, then the capital investment generate an actual return greater than the discount rate and the project will be accepted. The internal rate of return is the actual rate of return that a project earns. 2. Fill in the blank: Fill in the blank with either the phrase greater than , less than , or equal to . A . If a project's net present value is positive, the actual internal rate of return is _greater _ than the discount rate.

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