The Internal Rate of Return May Be Defined As

question 78

Multiple Choice

The internal rate of return may be defined as:

• A)the discount rate that makes the NPV cash flows equal to zero.
• B)the difference between the market rate of interest and the NPV.
• C)the market rate of interest less the risk-free rate.
• D)the project acceptance rate set by management.
• E)None of the above.

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Definitions:

Economic Profit

The financial margin that results from subtracting a business's complete expenditures, both seen and unseen, from its gross income.

Solid Silver

A term referring to objects made entirely from silver, a precious metal known for its high economic value and various uses in jewelry, tableware, and investment.

Competitively Organized

A market structure where multiple firms strive to sell similar products or services, often leading to innovation and lower prices.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing surplus earnings above normal expectations.