The Internal Rate of Return on an Investment Is the Discount

question 113

True/False

The internal rate of return on an investment is the discount rate that produces a present value of benefits greater than the cost of the investment.

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Definitions:

Parenthetical Remark

An explanatory or clarifying comment inserted into the text of financial statements or reports, often provided within parentheses to supplement the main information.

Derivative Financial Instruments

Financial contracts whose value is derived from the price movements of an underlying asset, such as stocks, bonds, commodities, or currencies.

Fair Value

An estimate of the price at which an asset or liability could be exchanged between willing participants in an arm's length transaction.

Historical Cost

The original monetary value of an economic item. Historical cost is based on the stable measuring unit assumption.