The internal rate of return is the interest rate that equates the cash outflows of an investment with the subsequent cash inflows.

Question

Quizplus · Accepted Answer

The definition of internal rate of return (IRR) is correct. It is the interest rate at which the net present value of all cash flows (positive and negative) from an investment is equal to zero. Essentially, it is the expected compound annual rate of return that will be earned on an investment.

The Internal Rate of Return Is the Interest Rate That