The internal rate of return is the rate of return that management desires to earn on its investments.

Question

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The internal rate of return (IRR) is the rate of return at which the present value of expected cash inflows from an investment equals the present value of cash outflows, and it is used to evaluate the attractiveness of an investment. It is not determined by management's desired rate of return, but rather by the cash flows generated by the investment.

The Internal Rate of Return Is the Rate of Return