In Comparing the Internal Rate of Return and Net Present

question 151

Multiple Choice

In comparing the internal rate of return and net present value methods of evaluation,

• A) internal rate of return is theoretically superior, but financial managers prefer net present value.
• B) financial managers prefer net present value, because it is presented as a rate of return.
• C) net present value is theoretically superior, but financial managers prefer to use internal rate of return.
• D) financial managers prefer net present value, because it measures benefits relative to the amount invested.

---

Definitions:

Managers

Individuals within an organization responsible for directing and overseeing the work of others to achieve the organization's goals.

Balanced Scorecard

A strategic planning and management system that is used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

Organizational Performance

Refers to how well an organization is meeting its goals and objectives through the efficiency and effectiveness of its operations and resource use.

Customer Service

The assistance and support provided by a company to those people who buy or use its products or services.