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The discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero.
The Internal Rate of Return (IRR) is a critical metric in capital budgeting, representing the discount rate at which the net present value of all cash flows from an investment equals zero. It’s used to evaluate and compare the profitability of investments or projects, providing insight into the expected yield of an investment over its lifespan.
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