The Use of Either the Internal Rate of Return or the Profitability

question 326

True/False

The use of either the internal rate of return or the profitability index could lead to incorrect decisions when comparing mutually exclusive investments.

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Definitions:

Contingency

A future event or circumstance that is possible but cannot be predicted with certainty, often requiring planning for different potential outcomes.

Antecedent

An event, condition, or cause that logically precedes and influences an outcome or result.

Consequence

The result or effect of an action or condition.

Voluntary Behaviors

Actions undertaken by choice and without external coercion, reflecting autonomy and personal preference.