Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return? Average rate of return Accounting rate of return Cash payback period Internal rate of return Solution d)Internal Rate of Return, IRR is computed using net present value, from it discount rate is identified to equates present value of future cash flow of an investment with initial investment. .

1. Which method of evaluating capital investment proposals uses the concept of present value to
compute a rate of return?
Average rate of return
Accounting rate of return
Cash payback period
Internal rate of return
Average rate of return
Accounting rate of return
Cash payback period
Internal rate of return
Solution
d)Internal Rate of Return, IRR is computed using net present value, from it discount rate is
identified to equates present value of future cash flow of an investment with initial investment.