alleryStart learning →What does the internal rate of return set equal to zero?
APayback period of the project
BCost of capital of the firm
CAccounting profit after tax
DNet present value of all cash flows
Answer & Solution
Correct answer: D. Net present value of all cash flows
IRR is by definition the discount rate at which the NPV of all inflows and outflows becomes zero.
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Related questions
The same return received later gives an IRR that is:If cash flows are random variables, as in a life annuity, IRR uses their:The AIRR approach of Magni was introduced to solve problems of:In personal finance the IRR measures what type of performance?With no capital constraint, which projects does a firm accept to maximize value?Mutually exclusive projects are those from which:The equivalent annuity method divides the NPV by what to annualize it?The equivalent annuity method is often used to compare projects of: