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$1.50 Multiple Choice - IRR method of evaluating investment projects

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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.
 

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  • Posted on Dec 12, 2007 at 4:01:07PM
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