Select the Incorrect Statement Concerning the Internal Rate of Return

question 2

Multiple Choice

Select the incorrect statement concerning the internal rate of return (IRR) method of evaluating capital projects.

• A) The higher the IRR the better.
• B) The internal rate of return is that rate that makes the present value of the initial outlay equal to zero.
• C) If a project has a positive net present value then its IRR will exceed the hurdle rate.
• D) A project whose IRR is less than the cost of capital should be rejected.

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Definitions:

RoadRanger Transmission

A brand name commonly associated with manual and automated manual transmissions for heavy-duty trucks, emphasizing durability and efficiency.

Non-synchronized

Referring to a gearbox that requires the operator to manually match gear speeds before engaging the gear, often found in older or specialized vehicles.

Double-clutching

A driving technique used in manual transmission vehicles where the clutch is depressed twice during a gear change to match the rotational speeds of the engine and transmission.

Axis Of Rotation

The axis of rotation refers to an imaginary line around which an object rotates or spins.