The discount rate that would return a net present value equal to zero is the:

Question

Quizplus · Accepted Answer

The definition provided aligns with the concept of internal rate of return (IRR). IRR is the discount rate that makes the net present value of an investment equal to zero. It represents the expected rate of return generated by the investment over its lifetime. Therefore, the correct option is D, internal rate of return. The other options, annual rate of return, accounting rate of return, and hurdle rate are different concepts, with distinct characteristics and purposes.

The Discount Rate That Would Return a Net Present Value