If the internal rate of return is used as the discount rate in the net present value calcula-tion, the net present value will be

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salantis [7]

2 years ago

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If the internal rate of return is used as the discount rate in the net present value calcula-tion, the net present value will be

?

Business

1 answer:

bezimeni [28] · Answer 1 · 2023-03-22T01:15:16+03:00

If the internal rate of return is used as the discount rate in the net present value calculations, the net present value will be equal to zero. The internal rate of return (IRR) is a financial analysis metric used to estimate the profitability of potential investments.

The IRR calculations use the same formula as NPV calculations. Keep in mind that the IRR is not the project's actual the dollar value. The annual return is what brings the NPV to zero. The IRR is calculated in the same way as net present value (NPV), except that it sets NPV to zero.

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