The Quickest Way to Calculate the Internal Rate of Return

question 6

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) Guessing the IRR

---

Definitions:

Finance Perspective

The viewpoint or approach focusing on financial management, investments, and the economic aspects of business operations.

Dividend Payout Ratio

The percentage of earnings a company distributes to its shareholders in the form of dividends, serving as a measure of how much profit is returned to shareholders versus retained for growth.

Finance Perspective

An approach or viewpoint focusing on the management of assets, liabilities, revenue, and investments within the framework of financial theory and practice.

Sustainable Rates Growth

The peak growth rate a firm can achieve in its earnings without resorting to more debt financing or selling additional shares.