Which of the Following Statements Related to the Internal Rate

question 99

Multiple Choice

Which of the following statements related to the internal rate of return (IRR) are correct?
I.The IRR method of analysis can be adapted to handle non-conventional cash flows.
II.The IRR that causes the net present value of the differences between two project's cash flows to equal zero is called the crossover rate.
III.The IRR tends to be used more than net present value simply because its results are easier to comprehend.
IV.Both the timing and the amount of a project's cash flows affect the value of the project's IRR.

• A)I and II only
• B)III and IV only
• C)I, II, and III only
• D)II, III, and IV only
• E)I, II, III, and IV

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Definitions:

Barbara Tversky

A cognitive psychologist known for her work in spatial cognition and cognitive maps.

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A mental picture or representation of an object or scene that is generated by the brain.