the discount rate that equates the present value of the cash inflows with the present value of the cash outflows.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16MC: When using the NPV method for a particular investment decision, if the present value of all cash...
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The internal rate of return is:

    1. the discount rate that equates the present value of the cash inflows with the present value of the cash outflows.
    2. the discount rate that makes NPV negative and the PI greater than one.
    3. the rate of return that makes the NPV positive.
    4. the discount rate that makes the NPV positive.

 

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