Question

    If net present value (NPV) of a project is zero at

    discount rate 10%, IRR is:
    A Less than 10% Correct Answer Incorrect Answer
    B Equal to 10% Correct Answer Incorrect Answer
    C Greater than 10% Correct Answer Incorrect Answer
    D Indeterminate Correct Answer Incorrect Answer

    Solution

    The Internal Rate of Return (IRR) is defined as the discount rate that makes the NPV of a project zero. Therefore, if NPV is zero at 10%, the IRR is 10%.

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