Question

Is the internal rate of return (IRR) method the only DCF method?
1) True
2) False

Answer 1

No, the internal rate of return (IRR) method is not the only method used in discounted cash flow (DCF) analysis. Other methods include the net present value (NPV) method, profitability index (PI) method, and payback period method.

Step-by-step explanation:

No, the internal rate of return (IRR) method is not the only method used in discounted cash flow (DCF) analysis.

DCF is a financial valuation method that is used to determine the present value of an investment by calculating the net present value (NPV) of its future cash flows.

While IRR is a common method used in DCF analysis, other methods include the net present value (NPV) method, profitability index (PI) method, and payback period method.