True or False: The interest rate that makes the net present value of the investment equal to zero is the internal rate of return.

The statement is true because the internal rate of return (IRR) is defined as the discount rate that causes the net present value (NPV) of an investment's cash flows to equal zero. This is a critical concept in capital budgeting and investment analysis. When calculating IRR, the aim is to determine the effectiveness of an investment by finding the rate at which the present value of expected cash inflows equals the present value of cash outflows. If the internal rate of return exceeds the required rate of return or cost of capital, the investment is generally considered favorable. Therefore, the accuracy of the statement is rooted in the definition and application of IRR in evaluating investment opportunities.