A Company That Is Using the Internal Rate of Return

question 103

Multiple Choice

A company that is using the internal rate of return (IRR) to evaluate projects should accept a project if the IRR:

• A) is greater than the project's net present value.
• B) equates the present value of the project's cash inflows with the present value of the project's cash outflows.
• C) is greater than zero.
• D) is greater than the hurdle rate.
• E) is less than the firm's cost of investment capital.

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Definitions:

Procedural Justice

Concerns the fairness and transparency of the processes used to make decisions, promoting impartiality and equal treatment.

Equivalent Qualifications

Credentials or qualifications that are considered to be equal in value, level, or function to others, despite being different in nature.

Same Consideration

The act of treating all parties or factors impartially and equally in a decision-making process.

Moral-rights View

An ethical perspective asserting that individuals have fundamental rights and liberties that must be respected in decision-making processes.