When Choosing Between Projects,an Alternative to Comparing Their IRRs Is

question 21

Multiple Choice

When choosing between projects,an alternative to comparing their IRRs is:

• A)to compute the incremental IRR,which tells us the discount rate at which it becomes profitable to switch from one project to the other.
• B)to compute the incremental payback period,which tells us the number of years during which it becomes profitable to switch from one project to the other.
• C)to compute the incremental NPV,which tells us the discount rate at which it becomes profitable to switch from one project to the other.
• D)There is no alternative selection criterion to comparing IRRs.

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Definitions:

Bureau of Labor Statistics

A unit of the United States Department of Labor that is responsible for collecting and analyzing important economic data, including employment and unemployment statistics.

Unemployed

Individuals who are capable of working and actively seeking employment but are unable to find a job.

Cyclical Unemployment

Unemployment that results from economic downturns or recessions, where there is insufficient demand for labor.

Bureau of Labor Statistics

A U.S. government agency that collects and analyses critical economic information, particularly employment and price statistics.