The Internal Rate of Return Measures

question 66

Multiple Choice

The internal rate of return measures:

• A) How quickly the initial investment can be re-couped
• B) The discount rate at which the net present value of the project is zero
• C) The profitability of an investment
• D) The rate at which future cash flows must be invested in order to obtain profitability LO

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Definitions:

Unearned Tuition

Income received by an educational institution for tuition that is yet to be earned by providing educational services.

Tuition Revenue

Income received by educational institutions for providing instructional services to students.

Spring Semester

The portion of the academic year that typically runs from January to May in many educational institutions.

Salvage Value

The calculated revenue an asset will generate upon being sold after its effective life span has passed.