The internal rate of return is a time-value-of-money yardstick that uses a specific interest rate used to discount all future cash inflows so that their present value equals the initial cash outflow.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is indeed 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.

The Internal Rate of Return Is a Time-Value-Of-Money Yardstick That