- CFA Exams
- 2021 CFA Level I Exam
- Study Session 10. Corporate Finance (1)
- Reading 32. Capital Budgeting
- Subject 3. Investment Decision Criteria

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**CFA Practice Question**

The IRR is defined as the ______.

B. difference between the cost of capital and the present value of the cash flows

C. discount rate used in the NPV method

A. discount rate that makes the NPV equal to zero

B. difference between the cost of capital and the present value of the cash flows

C. discount rate used in the NPV method

Correct Answer: A

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