Question

The Internal Rate of Return (IRR) represents which of the following: Multiple Choice The discount rate that must be lower than the required rate of return. The discount rate that makes the net present value equal to zero. The discount rate that makes the net present value positive. The discount rate that makes the net present value negative. The discount rate that is affected by the cash flows external to the project.

Answer 1

The discount rate that makes the net present value equal to zero.

Step-by-step explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

It is the discount rate that makes the net present value equal to zero.

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