Which of the following statements concerning the internal rate of return method of capital decision making is not correct?
A) The IRR is the rate of return that discounts the cash flows of a project so that the present value of the cash inflows just equals the present value of the cash outflows.
B) It takes into account the scale of projects.
C) It is used to find the rate of return of the project.
D) Its decision rule is to accept projects that have an IRR that is higher than the hurdle rate.
Correct Answer:
Verified
Q19: When an entity invests solely to replace
Q20: A retailer invests $500,000 in a new
Q21: An advantage of the NPV method is
Q22: Which of the following statements is true
Q23: A disadvantage of the payback period method
Q25: The equation used to find the IRR
Q26: If two investments are equally profitable, most
Q27: The opportunity cost of making an investment
Q28: If the interest rate is 8%,receiving $10
Q29: One assumption of the net present value
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents