At the internal rate of return (IRR),the present value of cash inflows will be equal to:

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate at which the net present value (NPV) of cash inflows equals the initial investment. Therefore, at the IRR, the present value of cash inflows will be equal to the initial investment (choice A). Average operating profit (choice B), residual value (choice C), and profit from the project (choice D) are not necessarily equal to the present value of cash inflows at the IRR.

At the Internal Rate of Return (IRR),the Present Value of Cash