The 'internal rate of return' is the discount rate that makes the net present value:

Question

Quizplus · Accepted Answer

The internal rate of return is the interest rate at which the net present value of cash flows from an investment equals zero. Therefore, the best choice is A because it represents the point at which the investment becomes financially viable or profitable. If the net present value were negative, it would mean that the investment is a bad choice, and if it were positive, it would mean that the investment is good, but the IRR is the point at which the investment will be zero.

The 'Internal Rate of Return' Is the Discount Rate That