A Project with an IRR That Is Less Than the Opportunity

question 93

Multiple Choice

A project with an IRR that is less than the opportunity cost of capital should be:

• A) accepted for all project types.
• B) accepted for all lending projects.
• C) accepted for all borrowing projects.
• D)rejected for all projects.

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Definitions:

Cost-to-retail Ratio

A method used to estimate the value of ending inventory based on the ratio of the cost of goods available for sale to the retail price of those goods.

Ending Inventory

The worth of products ready for sale at the close of an accounting cycle, determined by adding the initial inventory and purchases, then subtracting the cost of goods sold.

Retail Inventory Method

An accounting method used to estimate inventory value by calculating the cost to retail price ratio.

Cost To Retail Ratio

A method used in retail to calculate inventory value by comparing the cost of goods to their retail price.