Natalie Is Working on Calculating the IRR of a Project

question 61

Multiple Choice

Natalie is working on calculating the IRR of a project. Please refer to the figure above as you answer the questions below.
-Natalie's company has been going through a rocky time. Her boss asks her what would be an acceptable cash flow interval for calculating IRR. What should be her answer?

• A) every month
• B) every time a payment is received
• C) every time a bill is paid
• D) all of the above

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Definitions:

Adjusting Entry

A journal entry made in accounting to record changes in revenue and expense accounts in order to match revenues and expenses to the period in which they occurred.

Cash Invested

Money that is put into a business or project with the expectation of generating income or profit.

Accrued Interest

Interest that has accrued but remains unpaid.

Prepaid Insurance

Payments made for insurance services before the coverage period, recorded as an asset initially and expensed over time.