--%>

Define internal rate of return

What do you understand by the term internal rate of return?

E

Expert

Verified

Internal rate of return is employed to compute the even break point that is also another way to compute the cost of capital and it consists of the risk premium. It is the rate of return that is employed in capital budgeting that gives the indication of the profitability of investments. This is also named as discounted cash flow rate of return. This cannot be employed for equally exclusive projects where the selection can be done to only one project instead of both the projects.

   Related Questions in Business Economics

  • Q : Why Trade barriers hurt American

    Why Trade barriers hurt American consumers?

  • Q : Laissez-faire philosophy of government

    As per to the laissez-faire philosophy of government,: (1) economy works best while all investment decisions are centralized. (2) market system works best along with only minimal government intervention. (3) government must be restricted to stabilizin

  • Q : Marginal rate of substitution Problem:

    Problem: Luke likes to consumer CDs (good1) and pizzas (good 2). His preference over both goods is given by the utility function U(x1; x2) = x21

  • Q : Founder of modern economics The person

    The person along with, arguably, the top claim to the name “founder of modern economics”: (1) John Stuart Mill. (2) Karl Marx. (3) John Maynard Keynes. (4) Joan Robinson. (5) Adam Smith. Hello guys I wa

  • Q : Characterized contestable markets

    Industries that are described as "contestable": (w) will experience long-run economic profits equal to zero. (x) are difficult for firms to enter, but not to exit. (y) are difficult for firms to exit, but not to enter. (z) will charge prices greater t

  • Q : Enterprise is dictated primarily by

    “The legal form an enterprise assumes is dictated primarily by the financial requirements of its particular line of production.”  Do you agree?

  • Q : What happens in the product markets

    What happens in the product markets?

  • Q : Define explicit cost and implicit cost

    Briefly describe the term explicit cost and implicit cost?

  • Q : Change in supply and a change in the

    Distinguish between a change in supply and a change in the quantity supplied?

  • Q : Individual sellers and buyers in

    Both individual sellers and buyers within perfect competition: w) can affect the market price through their own individual actions. x) can affect the market price by joining along with some of their competitors.  y) have to take the market price as a specified. z