The discount rate that makes the net present value of an investment exactly equal to zero is called the
A)profitable rate of return.
B)internal rate of return.
C)average accounting return.
D)profitability index.
E)risk-free rate.

Question

Quizplus · Accepted Answer

The description matches the definition of internal rate of return. This is the rate that makes the present value of cash inflows equal to the initial investment. The other options are incorrect or not a perfect match to the given description.

The Discount Rate That Makes the Net Present Value of an Investment