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:

Customer Base

The group of consumers who repeatedly purchase the goods or services of a business, forming the foundation of the company's sales.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to fund its operations and investments.

High-growth Firms

Companies characterized by their fast-paced growth in revenues, market share, or employees, typically outperforming their industry averages.

High-tech

Referring to industries or products involving the latest technology, often in the fields of electronics, computers, and biotechnology.