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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
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.
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