What Is the Internal Rate of Return (IRR)of an Investment

question 22

Multiple Choice

What is the internal rate of return (IRR) of an investment that requires an initial investment of $10,000 today and pays $14,000 in one year's time?

• A)4%
• B)14%
• C)24%
• D)40%

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Definitions:

Long-Run Supply Curve

A graphical representation showing the relationship between price and the quantity supplied over time, when all inputs can be adjusted.

Competitive Market

A market structure characterized by many buyers and sellers, resulting in competition that influences prices and product offerings.

Limited Quantities

Refers to the restricted availability of goods or resources, which can affect pricing, demand, and supply conditions.

Opportunity Costs

The penalty of bypassing the next most advantageous option when a decision is made.