What Is the Internal Rate of Return

question 38

Multiple Choice

What is the internal rate of return?

• A) The discount rate at which the present value of expected cash inflows and outflows is equal.
• B) The discount rate that makes the net present value of the cash flows equal zero.
• C) The discount rate at which the present value of expected cash inflows and outflows is equal AND the discount rate that makes the net present value of the cash flows equal zero.
• D) The present value factor used to discount cash flows.

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Definitions:

Actual State

The present condition or situation of a system, process, or object without any alterations or modifications.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow, categorizing human needs into five levels from basic (such as physiological needs) to higher order (self-actualization).

Physiological Needs

The most basic human needs to be satisfied—water, food, shelter, and clothing.