Asked by Jacob Murphree on Jul 04, 2024
Verified
The internal rate of return is computed by finding the discount rate that equates the present value of a project's cash outflows with the present value of its cash inflows.
Internal Rate
This term might be incomplete or unclear; however, it is possibly referring to the internal rate of return (IRR), which is a metric used in financial analysis to estimate the profitability of potential investments.
Discount Rate
The rate of return that is used to find the present value of a future cash flow.
Cash Outflows
The total amount of money being spent by a business, commonly on expenses like rent, materials, payroll, and other operational costs.
- Understand the concept and calculation of the internal rate of return.
Verified Answer
JA
Jamie AllisonJul 09, 2024
Final Answer :
True
Explanation :
This is the definition of internal rate of return (IRR).
Learning Objectives
- Understand the concept and calculation of the internal rate of return.