A is corrent. The requirement is to identify the description of the internal rate of return. Answer D is correct because the internal rate of return is the time-adjusted rate of return from an investment.
B is incorrect because the net present value is present value of the future cash flows from the investment reduced by the amount of the initial investment.
C is incorrect because the payback period is the number of periods required to recoup the initial investment.
D is incorrect because the accounting rate of return is the return on the initial investment not adjusted for the time value of money.
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