A graph of a firm's acceptable capital projects ranked in the order of the projects' internal rate of return is called the firm's .
A)marginal cost of capital schedule
B)investment opportunity schedule
C)modified internal rate of return schedule
D)internal project classification schedule
E)optimal capital budget schedule

Question

Quizplus · Accepted Answer

The investment opportunity schedule (IOS) is a graph that shows a firm's acceptable capital projects ranked in order of the projects' internal rate of return (IRR). The IOS is an important tool for making capital budgeting decisions because it helps managers select projects that will generate the highest returns for the firm. The other choices are not accurate descriptions of the IOS.

A Graph of a Firm's Acceptable Capital Projects Ranked in the Order