The internal rate of return (IRR) is the interest rate that sets the net present value (NPV) of the cash flows equal to zero.
A. True
B. False
At irr,present value of inflows=present value of outflows.
NPV=Present value of inflows-Present value of outflows
Hence at irr;NPV=0
Hence the statement is True.
This irr is then compared to the required return to comment on the acceptability of the project etc.
The internal rate of return (IRR) is the interest rate that sets the net present value...
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