The Internal Rate of Return Method Ignores the Time Value

question 32

True/False

The internal rate of return method ignores the time value of money.

---

Definitions:

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Market Interest Rate

The prevailing rate at which borrowers are willing to borrow money and lenders are willing to lend money in the free market.

Money Demand Curve

A graph that shows the relationship between the quantity of money demanded and the interest rate.

Money Demand

The desire or need to hold money as opposed to investing it, influenced by interest rates and economic activity.