________ is the rate that causes the present value of all cash flows from a property (including its resale value)to be equal to the original purchase price of the property.

Question

Quizplus · Accepted Answer

The Internal Rate of Return (IRR) is the rate at which the present value of all future cash flows from a property (including its resale value) equals the original purchase price of the property. In other words, it is the discount rate that makes the Net Present Value (NPV) of the investment equal to zero. Therefore, the IRR is an important metric used in investment analysis to evaluate the profitability of a real estate investment. Choice B) NPV is also a relevant concept in real estate investment analysis, but it does not directly answer the question asked. Choice C) TWR (Time Weighted Rate of Return) and D) TVM (Time Value of Money) are not related to the calculation described in the question.

________ Is the Rate That Causes the Present Value of All