The rate of return approach

Question

Quizplus · Accepted Answer

The rate of return approach, often associated with the internal rate of return (IRR), determines the rate of interest at which the net present value (NPV) of all cash flows (both incoming and outgoing) from a project or investment equals zero. This method inherently considers the present value concept, contrasting with options A and D, and whether it is better than the present value approach (option B) is subjective and depends on the specific context or criteria for comparison.

The Rate of Return Approach