Which of the Following Statements About the Internal Rate of Return

question 10

Multiple Choice

Which of the following statements about the internal rate of return method is false?

• A)The internal rate of return is equal to the required rate of return when the net present value is equal to zero.
• B)The internal rate of return is greater than the required rate of return when the net present value is negative.
• C)The internal rate of return represents the expected rate of return on a project.
• D)The internal rate of return is the discount rate that forces the present value of a project's inflows to equal its outflows.

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Definitions:

Informational Social Influence

The process of changing one's behavior to fit in with the group due to the belief that the group is competent and has the correct information.

Authority

The power or right to give orders, make decisions, and enforce obedience.

Individual

An Individual refers to a single, distinct person separate from a group or society, often considered in terms of unique psychological characteristics.

Group Polarization

The phenomenon where a group's prevailing attitudes or beliefs become stronger or more extreme following group discussions.