The internal rate of return (IRR) on a proposed investment is the discount rate that makes the net present value of the investment:
A) greater than zero
B) equal to zero
C) less than zero
D) greater than the opportunity cost of not investing

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. This means it is the rate at which the investment breaks even considering the time value of money.

The Internal Rate of Return (IRR) on a Proposed Investment