BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Internal Rate of Return
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Internal Revaluation Reserve
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Investment Reserve Ratio
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Internal Risk Return
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Detailed explanation-1: -What Is Internal Rate of Return (IRR)? The internal rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis.
Detailed explanation-2: -Definition (IRR) The internal rate of return on an investment or project is the “annualized effective compounded return rate” or rate of return that sets the net present value of all cash flows (both positive and negative) from the investment equal to zero.
Detailed explanation-3: -Internal Rate of Return (IRR) is one such technique of capital budgeting. It is the rate of return at which the net present value of a project becomes zero. They call it ‘internal’ because it does not take any external factor (like inflation) into consideration.