What is the basic concept of IRR?
آئی آر آر کا بنیادی تصور کیا ہے؟
- Rate at which profits are maximized
- Rate at which costs are minimized
- Rate at which cash inflows equal cash outflows
- Rate at which investments are doubled
Explanation
IRR is the rate at which cash inflows equal cash outflows, making the net present value (NPV) zero.
It's the discount rate that balances the costs and benefits of an investment, revealing the rate of return required to break even.
Related MCQs
- Internal Revenue Rate
- Internal Risk Ratio
- Internal Rate of Return
- Interest Rate Revenue
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مالی اصطلاح میں، آر او آئی کا کیا مطلب ہے؟
- Rate of Investment
- Return On Investment
- Risk of Investment
- Revenue On Investment
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آئی آر آر کا آر او آئی سے موازنہ کیسے ہوتا ہے؟
- IRR considers time value of money; ROI does not
- ROI is more comprehensive
- IRR is simpler to calculate
- Both measure profitability identically
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آئی آر آر استعمال کرنے کی بنیادی تنقید کیا ہے؟
- Complexity
- Assumes reinvestment at IRR
- Ignores time value of money
- Requires discount rate
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آئی آر آر کس قسم کے منصوبوں میں خاص طور پر مفید ہے؟
- Projects with uniform cash flows
- Shortterm projects
- Projects with varying cash flows
- Projects with no initial investment
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