Final answer:
The correct information required to compute NPV includes the initial investment, cash inflows, and the discount rate. The answer is a) Initial investment, cash inflows, discount rate. NPV accounts for the time value of money by using the discount rate to assess investment profitability.
Step-by-step explanation:
The Net Present Value (NPV) is a financial metric used to assess the profitability of an investment. The pieces of information required to compute NPV are the initial investment, cash inflows, and the discount rate. The correct answer to which of the following pieces of information are required to compute NPV is: a) Initial investment, cash inflows, discount rate. NPV is calculated by discounting the expected cash inflows and outflows to their present value and subtracting the initial investment. The discount rate reflects the cost of capital or the risk-free rate plus a risk premium. The payback period is a different concept and is not used in the NPV calculation.