Suppose You Used the IRR Excel Function to Determine Whether

question 26

Multiple Choice

Suppose you used the IRR Excel function to determine whether an investment now would create enough profits in the future to be wise and it showed the IRR to be 8%. This investment is

• A)Wise at any interest rate
• B)Unwise at any interest rate
• C)Wise at interest rates above 8% and unwise at interest rates below 8%
• D)Wise at interest rates below 8% and unwise at interest rates above 8%

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Definitions:

Quick Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets, without relying on inventory.

Current Liabilities

Obligations or debts that a company is expected to pay within a year.

Assets

Resources owned or controlled by a business, viewed as providing future economic benefits.

Profitability

A measure of how much profit a business generates compared to its revenue or assets, indicating financial success.