The Net Present Value and Internal Rate of Return Methods

question 27

True/False

The net present value and internal rate of return methods will always agree on whether a project enhances or harms shareholder wealth.

---

Definitions:

Shift Outward

An economic term describing the expansion of a country's production possibility frontier, indicating increased capacity to produce goods and services.

Improvement In Technology

Enhancements or advancements in technology that lead to more efficient processes, products, or services.

Debt-to-Total-Assets Ratio

The debt-to-total-assets ratio is a financial metric that measures a company's leverage by comparing total debts to total assets.

Capital Structure

The manner in which a firm’s assets are financed; that is, the right side of the balance sheet. Capital structure is normally expressed as the percentage of each type of capital used by the firm such as debt, preferred stock, and common equity.