The internal rate of return is A more reliable as a decision making tool than

# The internal rate of return is a more reliable as a

• Test Prep
• 85
• 84% (111) 93 out of 111 people found this document helpful

This preview shows page 39 - 41 out of 85 pages.

204.The internal rate of return is: 205.Which of the following are elements of the internal rate of return method of analysis? I. the timing of the cash flowsII. the cutoff point after which any future cash flows are ignoredIII. the rate designated as the minimum acceptable rate for a project to be acceptedIV. the initial cost of an investment 206.The internal rate of return tends to be:
207.You are trying to determine whether to accept project A or project B. These projects are mutually exclusive. As part of your analysis, you should compute the crossover point by determining: 208.You are comparing two mutually exclusive projects. The crossover point is 9 percent. You determine that you should accept project A if the required return is 6 percent. This implies that you should: I. reject project B if the required return is 6 percent.II. always accept project A and always reject project B.III. always reject project A anytime the discount rate is greater than 9 percent.IV. accept project A anytime the discount rate is less than 9 percent.