The Internal Rate of Return (IRR)is Simply the Return on a Project

question 159

Multiple Choice

The internal rate of return (IRR) is simply the return on a project viewed as an investment. Therefore any project whose IRR exceeds the cost of capital:

• A)should be undertaken if the company has the resources to do it.
• B)contributes to wealth because it earns more than the cost of the money used to do it.
• C)should not be undertaken because IRR isn't as good as NPV.
• D)a and b

Grasp the concept and importance of comprehensive risk analysis in financial decision-making.

Recognize the impact of organizational reliance on individuals and its role in assessing default risk.

Understand the protective role of loan covenant provisions against credit risks.

Evaluate the effectiveness of different approaches to credit analysis.

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