Which of the following statements is TRUE?
A) The IRR of every project is based on it achieving a Net Present Value of zero.
B) It is preferable for the calculated IRR of a project to be below bank interest rates,
C) Discounted cash flows do not usually take into account the time value of money.
D) When comparing two projects, the one with the lower NPV should be preferred.

Question

Quizplus · Accepted Answer

The IRR (Internal Rate of Return) is the discount rate that makes the Net Present Value (NPV) of all cash flows from a project equal to zero.

Which of the Following Statements Is TRUE