Certified Business Analysis Professional (CBAP) — Question 15

A business analyst (BA) is assessing the different solution proposals. What type of financial calculation would the BA use to determine which solution is worth investing in based on its breakeven point?

Answer options

• A. Internal rate of return
• B. Discount rate
• C. Return on investment
• D. Net present value

Correct answer: A

Explanation

The correct answer is A, Internal rate of return, as it is used to evaluate the profitability of potential investments by determining the breakeven point. The other options, while important financial metrics, do not specifically focus on the calculation of breakeven points in investment scenarios.