Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows?

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) method uses present value concepts to calculate the rate of return that would make the net present value of all cash flows (both inflow and outflow) from a particular project equal to zero. This method is specifically designed to evaluate the profitability of a proposed investment based on present value principles.

Which Method of Evaluating Capital Investment Proposals Uses Present Value