Which of the following statements is CORRECT?
A) The IRR method appeals to some managers because it gives an estimate of the rate of return on projects rather than a dollar amount, which the NPV method provides.
B) The discounted payback method eliminates all of the problems associated with the payback method.
C) When evaluating independent projects, the NPV and IRR methods often yield conflicting results regarding a project's acceptability.
D) To find the MIRR, we discount the TV at the IRR.

Question

Quizplus · Accepted Answer

The IRR method is preferred by some managers because it provides an estimate of the rate of return, which is a percentage, rather than a dollar amount like the NPV method. This percentage can be compared to the company's cost of capital to determine if the project is acceptable.

Which of the Following Statements Is CORRECT