The discount rate that will result in a net present value of zero for the project is called the:
A) the present value of the project.
B) the internal rate of return of the project.
C) the net present value of the project.
D) net cash flow of the project.
E) profit of the project.

Question

Quizplus · Accepted Answer

The discount rate that will result in a net present value of zero for the project is called the internal rate of return (IRR) of the project. This means that at the IRR, the present value of the cash inflows is equal to the present value of the cash outflows, resulting in a net present value of zero. Therefore, choice B is the correct answer.

The Discount Rate That Will Result in a Net Present