This is the discount rate that equates the present value of the expected net cash flows with the initial cash outflowSelect one:a.Post-Payback Profitabilityb.Internal Rate of Returnc.Payback Periodd.Net Present Value
Question
This is the discount rate that equates the present value of the expected net cash flows with the initial cash outflowSelect one:a.Post-Payback Profitabilityb.Internal Rate of Returnc.Payback Periodd.Net Present Value
Solution
The correct answer is b. Internal Rate of Return. The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows (both positive and negative) from a project or investment equal to zero. It is used to evaluate the attractiveness of a project or
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