FINC 3610 Exam 3 2025 – Complete Study Guide &
Key Concepts
NPV - ANSWER ✨✔---Net Present Value stated as a dollar value. A measure of how much value is
created or added today by undertaking an investment (the difference between the investment's market
value and its cost).
IRR - ANSWER ✨✔---Internal Rate of Return stated as a percentage. The discount rate that makes
NPV = 0. May result in multiple answerwers or incorrect decisions
greater than zero - ANSWER ✨✔---Accept a project if the NPV is ____________________.
greater than the required rate of return - ANSWER ✨✔---Accept a project if the IRR is
____________________.
when money comes out today and money goes back in the future - ANSWER ✨✔---What types of
deals are analyzed using NPV and IRR?
Key Concepts
NPV - ANSWER ✨✔---Net Present Value stated as a dollar value. A measure of how much value is
created or added today by undertaking an investment (the difference between the investment's market
value and its cost).
IRR - ANSWER ✨✔---Internal Rate of Return stated as a percentage. The discount rate that makes
NPV = 0. May result in multiple answerwers or incorrect decisions
greater than zero - ANSWER ✨✔---Accept a project if the NPV is ____________________.
greater than the required rate of return - ANSWER ✨✔---Accept a project if the IRR is
____________________.
when money comes out today and money goes back in the future - ANSWER ✨✔---What types of
deals are analyzed using NPV and IRR?
