The IRR Is the Discount Rate That Equates the NPV

question 26

True/False

The IRR is the discount rate that equates the NPV of an investment opportunity with $0.

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Definitions:

Weighted Average

Weighted average is a calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to some of the numbers more than others.

Expected Value

The predicted value of a variable, calculated as a sum of all possible values each multiplied by the probability of its occurrence.

Unit Of Measure

A standard quantity used in measuring and expressing the quantity of an element, substance, or phenomenon.

Variance

A measure of the dispersion or spread of a set of data points around their mean value; it quantifies the degree to which these points differ from the mean.