Question: Why does the internal rate of return equate to a net present value of zero?

Why does the internal rate of return equate to a net present value of zero?

Step by Step Solution

★★★★★

3.41 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The internal rate of return is the rate of interest ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1365-B-C-A-B(4212).docx

120 KBs Word File

Students Have Also Explored These Related Cost Accounting Questions!

Q:

When does the internal rate of return model give an inappropriate decision when comparing two mutually exclusive projects?

Q:

Read the information regarding a possible new investment available from McGraw-Hills Connect or your course instructor. a. Complete the spreadsheet to estimate the projects annual after tax cash...

Q:

a. Complete the spreadsheet below by estimating the project's annual after tax cash flow. b. What is the investment's net present value at a discount rate of 10 percent? c. What is the investment's...

Q:

PLEASE COMPLETE NO LATER THAN 11/04 @8am Each question(1,2,& 3) must be a minimum of 200 words. Please EXPLAIN answers in FULL detail and make answers knowledgeable based off the attached reading,...

Q:

1. Which one of the following methods of project analysis is defined as computing the value of a project based upon the present value of the project's anticipated cash flows? A. constant dividend...

Q:

1. If the net present value of a project is positive (nonzero), then the project's: A. PI will be less than 1. B. internal rate of return will exceed its required rate of return. C. costs exceed its...

Q:

I need with these problems/exercises listed below (chapters attached). You must use the chapters to fill out the guidance report which is attached. Using the data for March/April Column. Chapter...

Q:

I need with these problems/exercises listed below (chapters attached). You must use the chapters to fill out the guidance report which is attached. Using the data for March/April Column. Chapter...

Q:

1. Which one of the following methods of project analysis is defined as computing the value of a project based upon the present value of the project's anticipated cash flows? A. constant dividend...

Q:

1. The length of time a firm must wait to recoup, in present value terms, the money it has invested in a project is referred to as the: A. Net present value period. B. Internal return period. C....

Q:

Compute the dollar amount of change and the percentage of change in Business News Group?s working capital each year during 2013 and 2014. Is this trend favorable or unfavorable? Total current assets...

Q:

Presto Company purchased equipment and these costs were incurred: Cash price $45,000 Sales taxes 3,600 Insurance during transit 640 Installation and testing 860 Total costs $50,100 Presto will record...

Q:

Generally speaking, a bondholder is a _ _ _ _ _ _ _ _ _ _ _ _ _ _ , and a stockholder is a _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . Group of answer choices risky assets; safe asset. investor; creditor....

Q:

Consider the following graph of the Canada/euro nominal exchange rate. Data from: Statistics Canada. a. If you travelled to Europe in 2015 and converted C$1,000 to euros, how many euros would you...

Q:

Answers are given in blue. Please solve only using Excel Functions. Any other explanation other than excel will be rejected. \f\f\f\f

Q:

BKE manufactures carbon capture modules. The firm does not currently pay a dividend and uses all company profits to expand a company-owned lithium mine. Analysts expect BKE to pay a dividend of $1.25...

Q:

Becker Industries is considering an all equity capital structure against one with both debt and equity. The all equity capital structure would consist of 26,000 shares of stock. The debt and equity...