alleryStart learning →Applied ex-post, the IRR measures:
Aa forecast return on a new project
Bthe hurdle rate set by management
Cthe expected inflation over the period
Dthe actual return of a historical investment
Answer & Solution
Correct answer: D. the actual return of a historical investment
Ex-post means after the event, so the IRR reports what a completed investment actually earned.
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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: