The Internal Rate of Return Method Provides a Rate of Return

question 3

Multiple Choice

The internal rate of return method provides a rate of return that approximates:

• A) The accounting rate of return
• B) The unadjusted rate of return
• C) Both the accounting rate of return and the unadjusted rate of return
• D) Neither the accounting rate of return nor the unadjusted rate of return

---

Definitions:

Corporate Tax Rate

The percentage of a corporation's profits that it must pay as tax to the government.

Straight Line Basis

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.

Market Value

The current price at which an asset or service can be bought or sold in the open market.

Working Capital

The difference between a company's current assets and its current liabilities, representing the short-term liquidity and operational efficiency of the company.