The internal rate of return (IRR) method estimates the rate of return that can be expected from a contemplated investment.

Question

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The statement is true. The Internal rate of return (IRR) method is a technique used to estimate the potential returns on an investment. It calculates the discount rate at which the present value of expected cash inflows equals the initial cost of the investment. The IRR is expressed as a percentage and represents the annualized rate of return earned by the investment over its life.

The Internal Rate of Return (IRR) Method Estimates the Rate