Which of the following is the discount rate that makes the NPV of cash flows produced over time equal to zero?
A) CPR
B) IRR
C) ROI
D) TCO

Question

Quizplus · Accepted Answer

The discount rate that makes the NPV of cash flows equal to zero is the Internal Rate of Return (IRR). It is the rate at which the net present value of future cash flows equals the initial investment. CPR (Constant Prepayment Rate) is a measure used in mortgage-backed securities, ROI (Return on Investment) is a measure of profitability, and TCO (Total Cost of Ownership) is a measure of the total cost of owning and operating an asset over its lifetime.

Which of the Following Is the Discount Rate That Makes