Terms to Learn

This chapter and the Glossary at the end of the text contain definitions of the following important terms:

  1. accrual accounting rate-of-return (AARR) method
  2. capital budgeting
  3. cost of capital
  4. discount rate
  5. discounted cash flow (DCF) methods
  6. discounted payback method
  7. hurdle rate
  8. inflation
  9. internal rate-of-return (IRR) method
  10. net present value (NPV) method
  11. nominal rate of return
  12. opportunity cost of capital
  13. payback method
  14. real rate of return
  15. required rate of return (RRR)
  16. time value of money