Which of the Following Outcomes Can Result When IRR Is

question 16

Multiple Choice

Which of the following outcomes can result when IRR is used in appraising projects with unconventional cash flows?

• A) Inaccurate ranking positions
• B) Mutual exclusivity
• C) High apparent opportunity costs
• D) Multiple solutions

---

Definitions:

Government Intervention

Actions by a government to affect the economy, often aiming to correct market failures or promote social welfare.

Imperfect Information

A market condition where all parties do not have equal access to all relevant information.

Life Insurance

A contractual agreement with an insurance company that provides a lump sum payment, known as a death benefit, to beneficiaries upon the insured person's death, in exchange for premium payments.

Market Failure

A scenario in which the distribution of goods and services through an unregulated market leads to inefficiencies, resulting in a decrease in overall social welfare.