The Acceptance of an Investment Project Implies That: Its IRR

question 21

Multiple Choice

The acceptance of an investment project implies that: Its IRR is greater than 15 percent.
Its NPV is greater than its IRR.
Its NPV is greater than 0.

• A)1
• B)2
• C)3
• D)Both 2 and 3

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing income and expenses.

Equity Method Investments

Accounting for investments where the investor has significant influence but not full control over the investee, recognizing their share of investee profits.

Cash Dividends

Distributions from a company to its shareholders, representing a share of the firm's profits.

Dividend Revenue

Income received from owning shares in a company when the company distributes some of its earnings to shareholders.