The discount rate that makes the net present value of an investment exactly equal to zero is called the:

A) External rate of return.
B) Internal rate of return.
C) Average accounting return.
D) Profitability index.
E) Equalizer.

Question

Shubham Dhingra · Accepted Answer

Final Answer : B, Explanation :  The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. This rate is used to evaluate the attractiveness of a project or investment.

The discount rate that makes the net present value of an investment exactly equal to zero is called the:

A) External rate of return.
B) Internal rate of return.
C) Average accounting return.
D) Profitability index.
E) Equalizer.

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Learning Objectives

Related questions

The discount rate that makes the net present value of an investment exactly equal to zero is called the:A) External rate of return.B) Internal rate of return.C) Average accounting return.D) Profitability index.E) Equalizer.

Definitions

Learning Objectives

Learning Objectives

Related questions

The discount rate that makes the net present value of an investment exactly equal to zero is called the:

A) External rate of return.
B) Internal rate of return.
C) Average accounting return.
D) Profitability index.
E) Equalizer.