The Internal Rate of Return of a Capital Investment

question 82

Multiple Choice

The internal rate of return of a capital investment

• A) Changes when the cost of capital changes.
• B) Is equal to the annual net cash flows divided by one half of the project's cost when the cash flows are an annuity.
• C) Must exceed the cost of capital in order for the firm to accept the investment.
• D) Is similar to the yield to maturity on a bond.
• E) Answers c and d are correct.

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