What Is the Decision Rule in the Case of Sign

question 41

Multiple Choice

What is the decision rule in the case of sign changes that produce multiple IRRs for a project?

• A)select the lowest IRR to be conservative.
• B)select the highest IRR to maximize the benefits.
• C)any or all of the IRRs are justified to use.
• D)evaluate the project according to NPV.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.

Days' Sales In Inventory

A financial metric indicating the average time in days that a company takes to turn its inventory into sales.

Return On Total Assets

A financial ratio that measures the profitability of a company relative to its total assets.

Return On Stockholders' Equity

A measure of the profitability of a corporation in relation to stockholders' equity, indicating how efficiently a company uses its equity to generate profits.