Question
$1.50 Multiple Choice - IRR method of evaluating investment projects
- From Business: Finance , Economics: Financial-Markets
- Closed, but you can still post tutorials
- Due on Dec. 19, 2007
- Asked on Dec 12, 2007 at 2:27:28PM
Q:
The internal rate of return (IRR) method for evaluating investment projects:
a. often leads to a different accept/reject conclusion for independent projects than the net present value (NPV) method.
b. determines a negative IRR if the present value of cash flows exceed the project's cost.
c. requires that projects will be accepted only if the IRR exceeds the firm's current cost of capital.
d. will rank mutually exclusive projects in the same way that NPV calculations will rank them.
I think I have ruled out "A" and "D" at this point.
a. often leads to a different accept/reject conclusion for independent projects than the net present value (NPV) method.
b. determines a negative IRR if the present value of cash flows exceed the project's cost.
c. requires that projects will be accepted only if the IRR exceeds the firm's current cost of capital.
d. will rank mutually exclusive projects in the same way that NPV calculations will rank them.
I think I have ruled out "A" and "D" at this point.
IRR Correct Option
- This tutorial hasn't been purchased yet.
- Posted on Dec 12, 2007 at 4:01:07PM
A:
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IRR.doc (24K)
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