Internal Rate of Return: What Is the Internal Rate of Return

question 81

Multiple Choice

Internal rate of return: What is the internal rate of return on this project? (Round to the nearest percent.)

• A) 17%
• B) 18%
• C) 19%
• D) 20%

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Definitions:

Investment

The commitment of resources such as capital or time to an endeavor with the expectation of obtaining an income or profit.

Percentage Total Return

A measure of the performance of an investment, calculated by dividing the investment's profit by its initial cost.

Dividends

Payments made by a corporation to its shareholder members, usually derived from profits.

Capital Gains Yield

The appreciation in the price of an investment, calculated as the increase in the investment's value divided by its initial purchase price.