Which of the following statements concerning the IRR is true?
A) The IRR does not take account of the time value of money.
B) The IRR does not take account of the all the project cash flows.
C) The IRR is the sum of the discounted cash flows of a project.
D) The IRR is the discount rate that, when applied to a project's cash flows, gives an NPV of zero.

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 particular project equal to zero.

Which of the Following Statements Concerning the IRR Is True