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:

LIFO

"Last In, First Out," an inventory valuation method where the last items added to inventory are the first to be used or sold.

Periodic Inventory System

An inventory accounting system where the inventory on hand is determined by physical count at the end of the accounting period, used to update inventory records and cost of goods sold.

Ending Inventory

The total value of all inventory in stock at the end of an accounting period, calculated before new inventory purchases are added.

Lower Of Cost

An accounting principle where the inventory is recorded at either its historical cost or market value, whichever is lower, to report assets conservatively.