The internal rate of return is the interest rate that equates the cash outflows of an investment with the subsequent inflows.

Question

Quizplus · Accepted Answer

This is a true statement. The internal rate of return, or IRR, is a financial metric used to calculate the potential profitability of an investment by determining the interest rate at which the net present value of the investment is zero. In other words, it is the rate at which the discounted cash outflows of an investment equal the discounted cash inflows.

The Internal Rate of Return Is the Interest Rate That