Presented below are terms preceded by letters a through g and followed by a list

Question

Presented below are terms preceded by letters a through g and followed by a list of definitions 1 through 7. Match the letter of the term with the definition. Use the space provided preceding each definition.
(a) Net Present Value
(b) Capital Budgeting
(c) Accounting Rate of Return
(d) Net Cash Flow
(e) Internal Rate of Return
(f) Payback Period
(g) Hurdle Rate
__________ (1) A discount rate that results in a net present value of zero.
__________ (2) Cash inflows minus cash outflows for the period.
__________ (3) A minimum acceptable rate of return.
__________ (4) The time expected to pass before the net cash flows from an investment equals its initial cost.
__________ (5) Annual after-tax net income divided by annual average investment.
__________ (6) A process of analyzing alternative long-term investments.
__________ (7) Initial cost of an investment subtracted from discounted future cash flows from the investment.

Explanation / Answer

(1) E

(2) D

(3) G

(4) F

(5) C

(6) B

(7) A

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