The Internal Rate of Return Is

question 31

Multiple Choice

The internal rate of return is:

• A) more reliable as a decision making tool than net present value whenever you are considering mutually exclusive projects.
• B) equivalent to the discount rate that makes the net present value equal to one.
• C) difficult to compute without the use of either a financial calculator or a computer.
• D) dependent upon the interest rates offered in the marketplace.
• E) a better methodology than net present value when dealing with unconventional cash flows.

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Definitions:

Lower-Income Segment

A portion of the population or market characterized by lower earnings, often targeted by businesses offering more affordable products or services.

Developing Economies

Countries that are in the process of industrialization, with relatively low per capita income and seeking to improve their economic base.

Market-Creating Innovations

Innovations that establish new markets by solving unserved or underserved problems and fulfilling unmet needs.

Performance Innovations

Innovations aimed at enhancing the efficiency, productivity, or effectiveness of operations in organizations or systems.