An Investment Is Acceptable If Its IRR

question 20

Multiple Choice

An investment is acceptable if its IRR:

• A) is exactly equal to its net present value (NPV).
• B) is exactly equal to zero.
• C) is less than the required return.
• D) exceeds the required return.
• E) is exactly equal to 100%.

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Definitions:

Perfect Correlation

A relationship between two variables where one variable can be perfectly predicted from the other, represented by a correlation coefficient of -1 or 1.

Correlation Coefficient

A numerical measure that quantifies the degree and direction of a relationship between two variables.

Body Mass

A measurement of a person's weight in relation to their height, commonly assessed using the Body Mass Index (BMI).

Direct Correlation

A positive relationship between two variables where an increase in one variable results in an increase in the other.