Use the Table for the Question(s)below

question 10

Multiple Choice

Use the table for the question(s) below.
Consider the following two projects with cash flows in $:
-The internal rate of return (IRR) for project B is closest to:

• A)21.6%.
• B)23.3%.
• C)42.9%.
• D)7.7%.

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Definitions:

Negative Alphas

A situation where an investment's return is less than the return predicted by its associated risk (alpha less than 0).

Risk-Free Rate

A revised definition for clarity: The theoretical return of an investment with zero risk, often represented by the yield on government treasury bonds.

Positive Slope

Represents a line or curve on a graph that depicts an increase in value as one moves from left to right, signifying a direct relationship between two variables.