The Interest Rate That Makes the Net Present Value of the Investment

question 32

True/False

The interest rate that makes the net present value of the investment equal to zero is the internal rate of return.

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having a financial stake and certain rights in the company.

RMBCA

The Revised Model Business Corporation Act (RMBCA) is a set of model laws prepared by the American Bar Association to provide a standard for the governance of corporations.

Pre-incorporation Subscription

An agreement by an investor to purchase shares in a corporation that is yet to be formed, contingent upon the actual incorporation of the company.

Revoked

The action of withdrawing, cancelling, or annulling something previously granted, such as a license, privilege, or legal right.