What is IRR?

Question

What is IRR?

Quizplus · Accepted Answer

IRR (Internal Rate of Return) is the discount rate that makes the net present value of an investment equal to zero. So, option D is the correct choice. Option A is incorrect because the breakeven point is the point at which the investment neither earns nor loses money, but IRR is the rate of return that makes NPV equal to zero. Option B is incorrect because the minimum acceptable rate of return is known as hurdle rate or required rate of return, and it may or may not be equal to IRR. Option C is also incorrect because the company's hurdle rate may be different from IRR.

What Is IRR