Asked by Dillon Bannister on Jul 04, 2024
Verified
The discount rate that makes the net present value of investment exactly equal to zero is the:
A) Payback period.
B) Internal rate of return.
C) Average accounting return.
D) Profitability index.
E) Discounted payback period.
Internal Rate Of Return
A financial metric used to estimate the profitability of potential investments by calculating the discount rate that makes the net present value of all cash flows equal to zero.
- Comprehend the Internal Rate of Return (IRR) and its application in comparing project viability.
Verified Answer
GA
Gökçe ArugünJul 09, 2024
Final Answer :
B
Explanation :
The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of an investment exactly equal to zero. It is used to evaluate the attractiveness of a project or investment.
Learning Objectives
- Comprehend the Internal Rate of Return (IRR) and its application in comparing project viability.