In comparing the internal rate of return and net

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Managerial Accounting: The Cornerstone of Business Decision-Making
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Chapter 13 / Exercise 7
Managerial Accounting: The Cornerstone of Business Decision-Making
Hansen/Mowen
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33. In comparing the internal rate of return and net present value methods of evaluation, (a) internal rate of return is theoretically superior, but financial managers prefer net present value. (b) net present value is theoretically superior, but financial managers prefer to use internal rate of return. (c) financial managers prefer net present value, because it is presented as a rate of return. (d) financial managers prefer net present value, because it measures benefits relative to the amount invested. Answer: B
Level of Difficulty: 3 Learning Goal: 6 Topic: NPV versus IRR
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Managerial Accounting: The Cornerstone of Business Decision-Making
The document you are viewing contains questions related to this textbook.
Chapter 13 / Exercise 7
Managerial Accounting: The Cornerstone of Business Decision-Making
Hansen/Mowen
Expert Verified
Chapter 9 Capital Budgeting Techniques 401 34. Unlike the net present value criteria, the internal rate of return approach assumes an interest rate equal to
Level of Difficulty: 3 Learning Goal: 6 Topic: NPV versus IRR 35. When evaluating projects using internal rate of return,
Level of Difficulty: 4 Learning Goal: 6 Topic: Internal Rate of Return 36. Which of the following capital budgeting techniques ignores the time value of money?
Level of Difficulty: 2 Learning Goal: 1 Topic: Capital Budgeting Techniques 37. Which of the following statements is false? (a) If the payback period is less than the maximum acceptable payback period, accept the project. (b) If the payback period is greater than the maximum acceptable payback period, reject the project. (c) If the payback period is less than the maximum acceptable payback period, reject the project (d) Two of the above. Answer: C
Level of Difficulty: 3 Learning Goal: 2 Topic: Payback Method
402 Gitman Principles of Finance,Eleventh Edition 38. Which of the following statements is false?
Level of Difficulty: 3 Learning Goal: 2 Topic: Payback Method

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