Rate of return that an investment provides its investor is classified as__________?
Correct answer: B. Internal rate of return
- A. Investment return rate
- B. Internal rate of return
- C. International rate of return
- D. Intrinsic rate of return
Explanation
The internal rate of return is the discount rate at which an investment's present value of inflows equals its initial cost, giving an investment-specific rate of return. The other terms are not standard measures of investment return.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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