The internal rate of return (IRR)is
A)the interest rate that allows an investor to recoup the initial investment.
B)the interest rate that ensures the positive cash flow of a project.
C)the interest rate that breaks even a project's costs and benefits.
D)the interest rate that measures the return from operating costs.
E)the interest rate that is set up by an investor to guarantee that the return on investment will be higher than from a bank interest rate.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero. This effectively means it is the rate that makes the project break even in terms of its costs and benefits.

The Internal Rate of Return (IRR)is