Asked by Yating Zhong on Jul 12, 2024
Verified
The internal rate of return equals the rate that yields a net present value of zero for an investment.
Net Present Value
A financial metric used to evaluate the profitability of an investment, representing the difference between the present value of cash inflows and outflows over a period.
- Comprehend the net present value method and its relevance to capital budgeting.
Verified Answer
KO
Krystle OcampoJul 18, 2024
Final Answer :
True
Explanation :
The internal rate of return (IRR) is the discount rate that sets the net present value (NPV) of an investment to zero. Therefore, the statement is true.
Learning Objectives
- Comprehend the net present value method and its relevance to capital budgeting.
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