The Internal Rate of Return May Be Defined As

question 39

Multiple Choice

The internal rate of return may be defined as:

• A) the discount rate that makes the NPV cash flows equal to zero.
• B) the difference between the market rate of interest and the NPV.
• C) the market rate of interest less the risk-free rate.
• D) the project acceptance rate set by management.

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Definitions:

Short-Term Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or one business cycle, whichever is longer.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Capital Structure Decisions

Strategic choices made by a firm regarding the mix of financial securities, such as debt and equity, to optimize its funding and operational goals.

Shares Of Stock

Units of ownership in a corporation or financial asset, providing a proportion of the profit to shareholders in the form of dividends.