The Internal Rate of Return Is a Measure Of

question 2

Multiple Choice

The internal rate of return is a measure of:

• A)the rate actually earned by the project,considering the time value of money.
• B)the rate actually earned by the project,based on accounting income.
• C)the rate used to discount the future cash flows to reflect the time value of money.
• D)the firm's cost of capital.

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Definitions:

Tax Rate

The amount of income or profits upon which tax is imposed for persons or businesses.

Sales

The total amount of revenue generated by a company through the sale of goods or services before any costs or expenses are deducted.

Operating Cash Flow

The cash generated from a company's regular business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Cash Flow

The aggregated sum of money being circulated in and out of a firm, importantly influencing its liquid financial resources.