Internal rate of return (IRR)method is also called the
A)discounted payback period method.
B)discounted cash flow (DCF)rate of return method.
C)modified internal rate of return (MIRR)method.
D)book rate of return method.

Question

Quizplus · Accepted Answer

The IRR method is also known as the Discounted Cash Flow (DCF) rate of return method because it calculates the rate of return based on the discounted cash flows of a project. The other options are incorrect: the discounted payback period method calculates the payback period based on discounted cash flows, the modified internal rate of return (MIRR) method adjusts for potential reinvestment rates, and the book rate of return method calculates the rate of return based on accounting profits.

Internal Rate of Return (IRR)method Is Also Called the