The Two Fatal flAws of the Internal Rate of Return

question 28

Multiple Choice

The two fatal flaws of the internal rate of return rule are:

• A)arbitrary determination of a discount rate and failure to consider initial expenditures.
• B)arbitrary determination of a discount rate and failure to correctly analyze mutually
• Exclusive investment projects.
• C)arbitrary determination of a discount rate and the multiple rate of return problem.
• D)failure to consider initial expenditures and failure to correctly analyze mutually exclusive
• Investment projects.
• E)failure to correctly analyze mutually exclusive investment projects and the multiple rate of
• Return problem.

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Definitions:

Depositional Feature

Depositional features are structures formed by the accumulation of sediment from wind, water, ice, or biological activity, including deltas, dunes, and sandbars.

Velocity

The speed and direction of an object's motion.

Curve

A smooth, continuous line or surface that deviates from being straight, often described in mathematics and geometry.

Stream Profile

The longitudinal profile of a stream, showing changes in elevation from its source to its mouth, often used in geomorphology.