The IRR
A) shows the graphical relationship between a project's NPV and cost of capital.
B) is the return that causes the NPV to be zero.
C) is the return that causes the NPV to be positive.
D) measures the firm and project's required rate of return.

Question

Quizplus · Accepted Answer

The IRR is the internal rate of return, which is the discount rate that makes the net present value (NPV) of a project equal to zero. Therefore, it is the return that causes the NPV to be zero.