15) Which of the following best describes the internal rate of return? A) interest rate that makes the net present value of the investment equal to zero B) discount rate that is used to evaluate funds borrowed from a lender for profitability C) the ratio of average annual income to average amount invested D) the rate at which the profitability of an investment increases 16) Bresnahan Corporation is considering an investment opportunity with the following expected net cash inflows: Year 1, $230,000; Year 2, $370,000; Year 3, $360,000. The company uses a discount rate of 13%, and the initial cost of the investment is $720,000. Present Value of $1: 15% 0.870 2 10% 0.909 0.826 0.751 0.683 0.621 11% 0.901 0.812 0.731 0.659 0.593 12% 0.893 0.797 0.712 0.636 0.567 13% 0.885 0.783 0.693 0.613 0.543 14% 0.877 0.769 0.675 0.592 0.519 3 4 5 0.756 0.658 0.572 0.497 The IRR of the project will be A) less than 13% B) between 13% and 14% C) between 14% and 15% D) more than 13%