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    Question

    IRR is the rate at

    which:
    A NPV = 0 Correct Answer Incorrect Answer
    B Profitability index = 1 Correct Answer Incorrect Answer
    C Total inflows = total outflows Correct Answer Incorrect Answer
    D Both A and B Correct Answer Incorrect Answer

    Solution

    Internal Rate of Return (IRR) is where NPV = 0 and PI = 1, meaning investment just recovers cost.

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