The Internal Rate of Return Assumes That Funds Are Reinvested

question 88

Multiple Choice

The internal rate of return assumes that funds are reinvested at the

• A) cost of capital.
• B) yield on the investment.
• C) minimal acceptable rate to the corporation.
• D) yield to maturity.

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Definitions:

Import Quotas

Limits set by a government on the amount of a specific good that can be imported into the country.

Loanable Funds

The market model that describes the supply and demand for money that is available for borrowing and lending.

Foreign-Currency Exchange

The process of exchanging one country's currency for another, affecting trade, investments, and economic indicators.

Capital Flight

The large-scale exodus of financial assets and capital from a country due to economic instability, political unrest, or unfavorable policies.