The IRR method calculates the rate at which discounted cash flows in and out are equal, essentially where the NPV is $0.

Name: The IRR method calculates the rate at which discounted cash flows in and out are equal, essentially where the NPV is $0.
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Question

Quizplus · Accepted Answer

The IRR method uses the concept of discounted cash flows to calculate the rate at which the net present value (NPV) of the cash inflows and outflows is equal to zero. Therefore, option A is correct.

The IRR Method Calculates the Rate at Which Discounted Cash