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Corporate Finance · Quiz 1 · 23 Feb 2025 · January 2025 term

Question 19: Which of the following statements is true about the inte…

Question 19

+4 marksOne correct option

Which of the following statements is true about the internal rate of return?

  1. A

    The internal rate of return is the rate at which the net present value of the cashflows is maximized.

  2. B

    The internal rate of return is the rate at which the net present value of the cashflows is zero.

  3. C

    The internal rate of return is the rate at which the net present value of the cashflows is minimized.

  4. D

    The internal rate of return is always greater than the cost of capital.

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Correct answer

  • B

    The internal rate of return is the rate at which the net present value of the cashflows is zero.

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Question 19 of 25 in the IIT Madras BS Corporate Finance (Corporate Finance) Quiz 1 paper sat on 23 Feb 2025, in the January 2025 term (IIT M DEGREE AN EXAM QDB2 23 Feb 2025). It carries 4 marks.

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