When using the net present value and the internal rate of return to evaluate capital projects:
A) The IRR is preferred because it more closely reflects the firm's goal of maximization of shareholder wealth.
B) Both will lead to the same decision if projects are mutually exclusive.
C) The two techniques may give different answers if the initial costs of the projects differ.
D) Both assume that the firm can reinvest earnings at the same rate.
Correct Answer:
Verified
Q2: The Internal Rate of Return is defined
Q3: Each of the following techniques use discounted
Q4: A manager can presume that the project
Q5: The higher the interest rate
A)The more valuable
Q6: The net present value
A)Is calculated by discounting
Q8: If the internal rate of return (r)
Q9: The basis of trade between countries lies
Q10: One similarity between international trade and inter-regional
Q11: The basis of trade between countries lies
Q12: The absolute advantage theory of international trade
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