The rate of return that results in a zero net present value for a project is called the:
A) Average rate of return
B) Internal rate of return
C) Required rate of return
D) Discount rate of return

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the rate at which the net present value (NPV) of a project equals zero. This means that the cash inflows from the project will be equal to the cash outflows when discounted at the IRR. The IRR is a useful measure of a project's profitability and is often used as a benchmark for comparing different investment opportunities.

The Rate of Return That Results in a Zero Net