The Internal Rate of Return Is

question 52

Multiple Choice

The internal rate of return is: 

• A) the discount rate that makes the net present value of a project equal to the initial cash outlay. 
• B) equivalent to the discount rate that makes the net present value equal to one. 
• C) tedious to compute without the use of either a financial calculator or a computer. 
• D) highly dependent upon the current interest rates offered in the marketplace. 
• E) a better methodology than net present value when dealing with unconventional cash flows. 

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Definitions:

Color

The characteristic of visual perception described through hue, saturation, and brightness.

Hematite

An iron oxide mineral with a metallic luster and reddish-brown streak, commonly used as an ore of iron.

Magnetite

A magnetic mineral form of iron(II,III) oxide, often found in igneous and metamorphic rocks.

Quartz

A hard, crystalline mineral composed of silicon dioxide, widely used in jewelry and as an industrial abrasive.