The Internal Rate of Return Method Is Not Subject to the Limitations

question 133

Multiple Choice

The internal rate of return method is not subject to the limitations of the net present value method when comparing projects with different amounts invested because:

• A)The internal rate of return is expressed as a percent rather than the absolute dollar value of present value.
• B)The internal rate of return is expressed as an absolute dollar value rather than the percent of net present value.
• C)The internal rate of return reflects the time value of money rather than the absolute dollar value of present value.
• D)The internal rate of return is expressed as an absolute dollar value rather than the time value of money used in net present value.
• E)The internal rate of return is expressed as a percent rather than the accrual income method used in net present value.

---

Definitions:

Gratuitous Bailment

A situation where property is voluntarily transferred into another's custody without expectation of payment.

Stradivarius

A type of high-quality stringed instrument made by members of the Stradivari family, particularly renowned violins.

Bailor

The party in a bailment who temporarily transfers possession but not ownership of a property to another party, the bailee.

Leasehold

An interest in a property that allows the holder (lessee) to use and occupy the land or premises for a specified period, under certain conditions, but does not provide ownership.