The Internal Rate of Return (IRR)is

question 69

Multiple Choice

The internal rate of return (IRR) is:

• A)the discount rate that makes the NPV greater than zero for a given set of cash flows.
• B)the discount rate that sets the FV of future CFs equal to the initial cash outlay.
• C)the opportunity cost of the capital invested in the project.
• D)the economic rate of return of a given project.

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Definitions:

Net Worth

The total value of an individual's or entity's assets minus liabilities, representing the financial health or wealth at a point in time.

Income

The monetary payment received for goods or services, or the earnings from investment over a particular period of time.

Equity Financing

The sale of shares of stock in exchange for cash.

Shares Of Stock

Units of ownership interest in a corporation or financial asset, which provide for an equal distribution in any profits, if any are declared, in the form of dividends.