In Comparing the Internal Rate of Return and Net Present

question 57

Multiple Choice

In comparing the internal rate of return and net present value methods of evaluation, ________.

• A) internal rate of return is theoretically superior, but financial managers prefer net present value
• B) net present value is theoretically superior, but financial managers prefer to use internal rate of return
• C) financial managers prefer net present value, because it is presented as a rate of return
• D) financial managers prefer net present value, because it measures benefits relative to the amount invested

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Definitions:

Perceptual

Perceptual relates to the ability to interpret or become aware of something through the senses.

Informational

Pertaining to or providing information.

Direct Request

A straightforward ask for a specific action or information without additional persuasion tactics.

Compliance

The act of conforming to rules, standards, or requests, often simply to fit in with a group or meet external expectations.