The IRR is the compound annual rate of return that the firm will earn if it invests in the project and receives the given cash inflows.

Question

Quizplus · Accepted Answer

This statement accurately describes what the internal rate of return (IRR) represents. It is the rate at which the project's net present value (NPV) equals zero, and represents the compound annual return on investment if the project is accepted and the cash inflows are received as projected.

The IRR Is the Compound Annual Rate of Return That