When the Internal Rate of Return (IRR) Method and the Net

question 33

Multiple Choice

When the internal rate of return (IRR) method and the net present value (NPV) method do not yield the same recommendation for the same investment project, the project-selection decision should normally be based on:

• A) IRR, because all reinvestment of funds occurs at the rate of the cost of capital and because it takes into consideration the relative size of the initial investment.
• B) NPV, because it takes into consideration the relative size of the initial investment.
• C) IRR, because all reinvestment of funds occurs at the discount rate that will make the NPV of the project equal to zero.
• D) NPV, because all reinvestment of funds occurs at the discount rate that will make the NPV of the project equal to zero.
• E) IRR, because all reinvestment of funds occurs at the rate the project generates and because it takes into consideration the relative size of the initial investment.

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Definitions:

Complement Action

An aspect of the immune system involving a series of proteins that enhance the ability of antibodies and phagocytic cells to clear pathogens from an organism.

Germinal Centers

Areas within lymph nodes where mature B cells rapidly divide, differentiate, and mutate their antibody genes during an immune response.

Lymph Nodes

Small, bean-shaped structures that produce and store cells that help fight infection and disease as part of the lymphatic system.

Lymphocytes

A subclass of white blood cells vital to the immune system, involved in producing antibodies and destroying infected or cancerous cells.