The Internal Rate of Return Can Be Calculated by Solving

question 30

Multiple Choice

The internal rate of return can be calculated by solving for ki after setting net present value equal to:

• A) zero.
• B) the initial investment cost or outlay.
• C) the cost of capital.
• D) expected cash flows.

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Definitions:

Regression Model

A statistical model that estimates the relationship between a dependent variable and one or more independent variables.

Individual Coefficient

A specific value that quantifies some type of relationship in mathematical or statistical models.

Standard Error

The standard deviation of the sample distribution of a statistic, often used to estimate the precision of sample means.

F-statistic

A ratio of variances that is used to test the overall significance of a multiple regression model; it compares model fit versus random variance.