The IRR Model Determines the Interest Rate at Which the NPV

question 125

True/False

The IRR model determines the interest rate at which the NPV of an investment equals zero.

---

Definitions:

Wages

Payment to resource owners for their labor.

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive or negative.

Precision-estimates

The accuracy of an estimate in terms of how closely it predicts the actual value, often relevant in statistical analyses and forecasting.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.