The Internal Rate-Of-Return (IRR)method Calculates ________

question 65

Multiple Choice

The internal rate-of-return (IRR) method calculates ________.

• A) the discount rate at which an investment's present value of the total of all expected cash inflows equals the present value of its expected cash outflows.
• B) the discount rate at which an investment's future value of all expected cash inflows equals the present value of its expected cash outflows.
• C) the discount rate at which an investment's total of all expected cash inflows equals the present value of its expected cash outflows.
• D) the discount rate at which sum of an investment's present value of all expected cash inflows equals the present value of its expected cash outflows.

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Definitions:

Weighted Average

An average that accounts for the different weights or importance of certain factors or quantities in the dataset.

Sample Variances

Sample variances measure the dispersion or spread of data points in a sample around their sample mean, indicating the degree of variation within the sample.

Expected Value

The long-run average value of repetitions of the experiment it represents, known in statistics as the mean of the probability distribution.

Sample Means

Sample Means are the averages calculated from a sample, used as estimates of the population mean.