An investment's internal rate of return equates
A)dividend payments and capital gains
B)cash outflows and subsequent cash inflows
C)initial cash outflow and the sale price
D)dividend payments and the investment's cost

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is a financial metric used to evaluate the profitability of potential investments. It is the discount rate that makes the net present value (NPV) of all cash flows (both positive and negative) from a particular project equal to zero. Therefore, it equates cash outflows (initial investment) with subsequent cash inflows (returns or profits).

An Investment's Internal Rate of Return Equates