For Mutually Exclusive Projects,the Internal Rate of Return and the Net

question 24

Multiple Choice

For mutually exclusive projects,the internal rate of return and the net present value give consistent accept/reject decisions if:

• A)the net present value profiles for both projects do not intersect.
• B)the required rate of return is less than the discount rate,which causes the net present value profiles of the two projects to intersect.
• C)the investment projects have equal lives.
• D)the investment projects have identical cash flows in the final year.

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Definitions:

Gross Margin Ratio

Gross margin ratio is a financial metric that measures a company's gross profit relative to its sales revenue, indicating the efficiency of production and pricing strategies.

Relative Liquidity

A measure of the ease with which an asset can be converted into cash without affecting its market price, compared to other assets.

Music Store Business

A commercial establishment that sells musical instruments, sheet music, and/or recorded music.

Gross Method

An accounting method for recording purchases at the invoice's full amount without deducting any cash discounts.