The Quickest Way to Calculate the Internal Rate of Return

question 72

Multiple Choice

The quickest way to calculate the internal rate of return (IRR) of a project is by

• A)trial and error method.
• B)using the graphical method.
• C)using a financial calculator.
• D)doubling the opportunity cost of capital.

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Definitions:

Rate of Return

The accrual or depletion in value of an investment over a stipulated period, expressed in terms of the percentage of the investment's beginning cost.

Save

The act of putting money aside in a safe place for future use or investment, typically in a bank account or other financial instrument.

Years

A unit of time equivalent to 365 or 366 days, used to measure durations or periods on a calendar basis.

Payments

Transactions involving the transfer of money from one party to another, often in exchange for goods or services.