When the present value of expected cash inflows from a project equals the present value of expected cash outflows of a project, the discount rate is the
A)universal rate.
B)internal rate of return.
C)required rate.
D)net present value rate.
E)inflation rate.

Question

Quizplus · Accepted Answer

When the present value of expected cash inflows equals the present value of expected cash outflows, the project is said to have a net present value of zero. The discount rate that makes the net present value zero is called the internal rate of return (IRR). Therefore, the correct answer is B.

When the Present Value of Expected Cash Inflows from a Project