The Internal Rate of Return of a Project Is the Rate

question 54

Multiple Choice

The internal rate of return of a project is the rate of return that equates the present value of its net cash flows with its:

• A)outflow.
• B)working capital.
• C)initial cash outlay.
• D)required rate of return.

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Definitions:

Probability

The measure or likelihood of a particular event or outcome occurring.

Sampling Error

The discrepancy between the statistical characteristics of a sample and those of the overall population, arising because the sample is not perfectly representative.

Mean Number

The average value of a set of numbers, calculated by dividing the sum of all the numbers by the count of the values.

Binomial Variable

A type of random variable that takes on one of two possible outcomes, for instance, success or failure, often with a fixed probability of occurrence.