The Internal Rate of Return for a Project Will Increase

question 83

Multiple Choice

The internal rate of return for a project will increase if:

• A)the initial cost of the project can be reduced.
• B)the total amount of the cash inflows is reduced.
• C)each cash inflow is moved such that it occurs one year later than originally projected.
• D)the required rate of return is reduced.
• E)the salvage value of the project is omitted from the analysis.

---

Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having an ownership interest in the company.

Regulations

Rules and guidelines issued by governmental agencies to control or direct the conduct of activities.

Foreign Currency

Currency other than the functional currency of the entity, used in international transactions or financial statements.

Reporting Currency

The reporting currency is the currency used to present the financial statements of a company, usually the domestic currency of the country where the company is located.