The rate of interest that produces a zero net present value when a project's discounted cash operating advantage is netted against its discounted net investment is the
A)cost of capital.
B)discount rate.
C)cutoff rate.
D)internal rate of return.

Question

Quizplus · Accepted Answer

The rate of interest that produces a zero net present value when the discounted cash flows from a project are equated with its initial investment is known as the internal rate of return (IRR). As a result, alternative D is the right option.

The Rate of Interest That Produces a Zero Net Present