The Internal Rate of Return

question 53

Multiple Choice

The internal rate of return

• A)is more reliable as a decision making tool than net present value when considering mutually exclusive projects.
• B)is the discount rate that makes the net present value of a project equal to one.
• C)is easier to apply than net present value when cash flows are unconventional.
• D)will provide the same accept/reject decision as NPV when cash flows are conventional and projects are independent.
• E)is influenced by daily changes in the market rate of interest.

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Definitions:

SUMIFS

A function in Excel that adds the cells specified by a given set of conditions or criteria.

Precedents

In computing, refers to cells in a spreadsheet that affect the formula in another cell; in law, it refers to previous court decisions that guide future cases.

Create From Selection

A feature in various software applications that allows users to generate new content or objects based on a selected item or area.

Defined Names

In spreadsheet applications, user-assigned names to cells, ranges, formulas, or constants to make referencing them easier and more intuitive.