The net present value and the internal rate of return equations are the same,except that the IRR the equation is set to

Question

Quizplus · Accepted Answer

In the IRR equation, the net present value is set to zero, while in the NPV equation, the discount rate is adjusted to make the net present value equal to zero. This means that the two equations are effectively the same, just presented in different forms. Therefore, choice A is the best answer as it correctly identifies the difference between the two equations.

The Net Present Value and the Internal Rate of Return