What rate of return is used in calculating net present value of a project?

Question

Quizplus · Accepted Answer

The required rate of return (also known as the discount rate) is the rate used in calculating the net present value of a project. This rate represents the minimum rate of return that an investor requires to invest in the project, taking into account the investment's risk and opportunity cost. The internal rate of return (A) is the rate at which the project's net present value is zero, and it is used to determine the project's profitability. The rate of return required by investment bankers (B) may differ from the required rate of return and is not used in calculating the net present value.

What Rate of Return Is Used in Calculating Net Present