A: is the preferred method for evaluating mutually exclusive projects.
B: is not sensitive to the pattern or timing of the cash flows from the period.
C: assumes that all cash flows from the project will be reinvested at the computed IRR.
举一反三
- Which of the following statements is themostaccurate description concerning the internal rate of return (IRR) method? IRR: A: is the preferred method for evaluating mutually exclusive projects. B: assumes that all cash flows from a project will be reinvested at the computed IRR. C: is sensitive to changes in the firm’s weighted average cost of capital.
- Which of the following is NOT a problem associated with the internal rate of return (IRR) method for making investment decisions:（） A: IRR and NPV criteria can give conflicting decisions for mutually exclusive projects. B: if the IRR is above the firm’ s cost of capital, the project should be rejected. C: The IRR method assumes cash flows are reinvested at the investment’ s internal rate of return.
- The internal rate of return (IRR) method and net present value (NPV) method of project selection will always provide the same accept or reject decision when:（） A: the projects are mutually exclusive. B: the projects are independent. C: the projects terminate within five years.
- Which of the following statements is FALSE? A: The incremental IRR need not exist. B: If a change in the timing of the cash flows does not affect the NPV, then the change in timing will not impact the IRR. C: Although the incremental IRR rule can provide a reliable method for choosing among projects, it can be difficult to apply correctly. D: When projects are mutually exclusive, it is not enough to determine which projects have positive NPVs.
- The profitability index is the ratio of the A: future value of cash flows to investment. B: net present value of cash flows to investment. C: net present value of cash flows to IRR. D: present value of cash flows to IRR.
内容
- 0
Internal Rate of Return (IRR) is the discount rate which yields a zero ( ) A: Discounted Cash Flow B: Annual cash flow C: Payback period D: Net Present Value
- 1
You have determined the profitability of a planned project by finding the present value of all the cash flows from that project. Which of the following would cause the project to look more appealing in terms of the present value of those cash flows? ( ) A: Statements a and b are correct. B: C: Statements b and c are correct. D: The cash flows are extended over a longer period of time, but the total amount of the cash flows remains the sam E: The discount rate decreases. F: The discount rate increases.
- 2
When evaluating two mutually exclusive investments, the best method to use is the: A: modified internal rate of return. B: net present value. C: profitability index. D: average accounting return. E: internal rate of return.
- 3
Which of the following statements is FALSE? A: The payback investment rule is based on the notion that an opportunity that pays back its initial investments quickly is a good idea. B: An internal rate of return (IRR) will always exist for an investment opportunity. C: A net present value (NPV) will always exist for an investment opportunity. D: In general, there can be as many internal rates of return (IRRs) as the number of times the project's cash flows change sign over time.
- 4
In what way is the modified internal rate of return (MIRR) method better than the IRR method?