The Internal Rate of Return Does NOT Take into Account

question 86

Multiple Choice

The internal rate of return does NOT take into account the ____.

• A) explicit risk of the net cash flows
• B) magnitude of cash flows over the project's life
• C) net investment
• D) timing of cash flows over the entire life of a project

---

Definitions:

T Value

A calculated value from a t-test used to compare the differences between means in relation to the variation in sample data.

Sample Size

The number of observations or data points collected in a study or used in a statistical analysis.

Interval Estimate

An estimate of a population parameter that provides a range of values, defined by lower and upper bounds, that is likely to contain the parameter of interest.

Z Value

A statistic indicating how many standard deviations an element is from the mean in a normal distribution.