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    Question

    The discount rate that makes the present value of expected cash flows from the project equal to the initial cost of the project is called:

    A Net Present Value Correct Answer Incorrect Answer
    B Internal Rate of return Correct Answer Incorrect Answer
    C Interest Rate Correct Answer Incorrect Answer
    D Base Rate Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The discount rate that makes the present value of expected cash flows from the project equal to the initial cost of the project is called the Internal Rate of return.

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