Which of These Statements About Internal Rate of Return Analysis

question 49

Multiple Choice

Which of these statements about internal rate of return analysis is BEST?

• A)If the IRR is less than the company's required rate of return,the project is worth funding.
• B)Projects having lower IRR are generally superior to those having higher IRR.
• C)IRR and NPV calculations always make the same investment recommendations.
• D)If net outflows follow a period of net inflows,IRR may give conflicting results.

---

Definitions:

Paper Production

The process of manufacturing paper from raw materials like wood pulp, involving various stages such as pulping, pressing, and drying.

Inferior Good

A good whose demand decreases as the income of consumers increases, inversely related to income levels.

Income of Buyers

Refers to the purchasing power or total earnings of consumers within a market, impacting their ability to buy goods and services.

Improved Oven

A term referring to an oven with enhanced features or efficiency, signifying technological innovation or investment in capital goods.