The Internal Rate of Return (IRR) Is Often Preferred by Managers

question 47

Multiple Choice

The internal rate of return (IRR) is often preferred by managers over the net present value (NPV) because the IRR:

• A) Is more reliable given unconventional cash flows.
• B) Is the discount rate that maximizes net profits.
• C) Is contingent upon the current market rates of return.
• D) Reveals the discount rate that maximizes the net present value.
• E) Is expressed as a rate while the NPV is expressed in dollar terms.

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Definitions:

Prevalence

The proportion of individuals in a population who have a particular disease or condition at a specific time.

Risk Factors

Elements or conditions that increase the likelihood of developing a disease or injury, including genetic, environmental, and lifestyle factors.

Scientific Method

A systematic and logical approach to discovering how things in the universe work, involving observation, experimentation, and data analysis.

Basic Rights

Fundamental entitlements inherent to all individuals, including the rights to life, liberty, and security.