The internal rate of return is the:

A. discount rate that causes a project's aftertax income to equal zero.
B. discount rate that results in a zero net present value for the project.
C. discount rate that results in a net present value equal to the project's initial cost.
D. rate of return required by the project's investors.
E. project's current market rate of return.

Ans: B. discount rate that results in a zero net present value for the project.