You can determine a project's ____ by finding what discount rate results in an NPV of zero for the project.
A)internal rate of return (IRR)
B)required rate of return
C)payback period
D)return on investment (ROI)

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of a project equal to zero. Therefore, by finding the discount rate that results in an NPV of zero, we can determine the project's IRR. The other options (B) required rate of return, (C) payback period, and (D) return on investment are not directly related to finding the discount rate that results in an NPV of zero.

You Can Determine a Project's ____ by Finding What Discount