When the IRR Rule Is Used for Mutually Exclusive Projects,we

question 32

Multiple Choice

When the IRR rule is used for mutually exclusive projects,we should mainly rely on

• A) the rule of the Modified Internal Rate of Return (MIRR).
• B) the rule of the Incremental Internal Rate of Return (IIRR).
• C) the rule of the Net Present Value (NPV).
• D) the rule of the normal Internal Rate of Return (IRR).

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Definitions:

Default

Failing to fulfill a legal obligation, such as not making a scheduled payment on a loan.

Negotiable Instrument

An official paper that promises the disbursement of a designated sum of money, which can be demanded at any time or paid at an agreed-upon moment, identifying the payer.

Given Value

The consideration or price paid for something; often used in the context of transactions or agreements to denote the value exchanged.

Antecedent Claim

A claim or right that precedes another in time or is earlier within a legal context or agreement.