The Internal Rate of Return Is Defined as The

question 55

Multiple Choice

The internal rate of return is defined as the: 

• A) maximum rate of return a firm expects to earn on a project. 
• B) rate of return a project will generate if the project is financed solely with internal funds. 
• C) discount rate that equates the net cash inflows of a project to zero. 
• D) discount rate which causes the net present value of a project to equal zero. 
• E) discount rate that causes the profitability index for a project to equal zero. 

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Definitions:

Pleasure

A feeling of happiness, enjoyment, or satisfaction derived from experiencing or doing something desirable.

Insulation Job

The installation of insulating materials in buildings or structures to reduce the transfer of heat and enhance energy efficiency.

Annual Fuel Bill

The total cost incurred by an entity or an individual for fuel consumption over the course of a year.

Interest Rate

The charge, presented as a percentage of the principal, required by a lender from a borrower for the employment of assets.