The Internal Rate of Return Is the Interest Rate That

question 132

Multiple Choice

The internal rate of return is the interest rate that results in a

• A) positive NPV.
• B) negative NPV.
• C) zero NPV.
• D) positive or negative NPV.

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Definitions:

Consumption

Families engaging in the use of products and services.

Income

Sums of money attained, usually on a fixed schedule, from work or investment undertakings.

Interest Rate

The proportion at which principal loaned money is repaid with interest to the lender over time, usually as an annual rate.

Utility Function

A mathematical representation that ranks individuals' or entities' preferences over a set of goods or outcomes.