Section 95 Topic Internal rate of return 7 You are viewing a graph that plots

# Section 95 topic internal rate of return 7 you are

• Rutgers University
• FINANCE 310
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Section: 9.5Topic: Internal rate of return
7.You are viewing a graph that plots the NPVs of a project to various discount rates that could be applied to the project's cash flows. What is the name given to this graph? A. project tractB. projected risk profileC.NPV profileD. NPV routeE. present value sequenceRefer to section 9.5AACSB: AnalyticBlooms: RememberDifficulty: 1 EasyLearning Objective: 09-05 The internal rate of return criterion and its strengths and weaknesses.Section: 9.5Topic: NPV profile8.There are two distinct discount rates at which a particular project will have a zero net present value. In this situation, the project is said to: A. have two net present value profiles.B. have operational ambiguity.C. create a mutually exclusive investment decision.D. produce multiple economies of scale.E.have multiple rates of return.Refer to section 9.5AACSB: AnalyticBlooms: RememberDifficulty: 1 EasyLearning Objective: 09-05 The internal rate of return criterion and its strengths and weaknesses.Section: 9.5Topic: Multiple rates of return9.If a firm accepts Project A it will not be feasible to also accept Project B because
both projects would require the simultaneous and exclusive use of the same piece of machinery. These projects are considered to be: A. independent.B. interdependent.C.mutually exclusive.D. economically scaled.E. operationally distinct.Refer to section 9.5AACSB: AnalyticBlooms: RememberDifficulty: 1 EasyLearning Objective: 09-05 The internal rate of return criterion and its strengths and weaknesses.Section: 9.5Topic: Mutually exclusive10.The present value of an investment's future cash flows divided by the initial cost of the investment is called the: A. net present value.B. internal rate of return.C. average accounting return.D.profitability index.E. profile period.Refer to section 9.6AACSB: AnalyticBlooms: RememberDifficulty: 1 EasyLearning Objective: 09-07 The profitability index and its relation to net present value.Section: 9.6Topic: Profitability index11.A project has a net present value of zero. Which one of the following best describes this project?
A. The project has a zero percent rate of return.B. The project requires no initial cash investment.C. The project has no cash flows.D. The summation of all of the project's cash flows is zeroE.The project's cash inflows equal its cash outflows in cuRefer to section 9.1AACSB: AnalyticBlooms: UnderstandDifficulty: 1 EasyLearning Objective: 09-01 The reasons why the net present value criterion is the best way to evaluate proposed investments.Section: 9.1Topic: Net present value

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