The internal rate of return (IRR) is the
A) Rate of interest (%) that equates the present value of after-tax cash outflows and the present value of after-tax cash inflows for a given project.
B) Minimum acceptable rate of return for a proposed investment.
C) Risk-adjusted rate of return.
D) Required rate of return for new investment projects.
E) Weighted-average rate of return generated by internally generated funds.

Question

Quizplus · Accepted Answer

The IRR is the rate at which the present value of expected cash inflows from a project equals the present value of expected cash outflows, and is therefore the rate at which the project's net present value is zero. It is a key metric used in capital budgeting and investment analysis to evaluate the potential profitability of an investment or project.

The Internal Rate of Return (IRR) Is the