The internal rate of return is the simple (noncompounded)interest rate that equates the present value of the cash inflows received with the initial investment.

Question

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The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows (both positive and negative) from a particular investment equal to zero. It is not a simple interest rate but rather a compounded rate of return.

The Internal Rate of Return Is the Simple (Noncompounded)interest Rate