The internal rate of return

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Reference no: EM131268094

The internal rate of return is:

The discount rate that makes the net present value of a project equal to the initial cash outlay.

Equivalent to the discount rate that makes the net present value equal to one.

Tedious to compute without the use of either a financial calculator or a computer.

Highly dependent upon the current interest rates offered in the marketplace.

A better methodology than net present value when dealing with unconventional cash flows.

Reference no: EM131268094

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