Question

that forces the PV of its inflows to equal its cost. The IRR is an estimate of the project's rate of return, and it is comparable to the

Answer 1

Discount rate

YTM

Step-by-step explanation:

Here is the full question :

A project's internal rate of return (IRR) is the

-Select-

compound rate

discount rate

risk-free rate

that forces the PV of its inflows to equal its cost. The IRR is an estimate of the project's rate of return, and it is comparable to the

-Select-

YTM

coupon

gain

on a bond.

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

A project should be chosen if it's IRR is greater than the discount rate.

Internal rate of return is one of the capital budgeting methods. Other methods are :

1. Net present value

2. Profitability index

3. Pay back method

4. Discounted pay back method

5. Accounting rate of return