When Evaluating Projects Using Internal Rate of Return

question 150

Multiple Choice

When evaluating projects using internal rate of return,

• A) projects having lower early-year cash flows tend to be preferred at higher discount rates.
• B) projects having higher early-year cash flows tend to be preferred at higher discount rates.
• C) projects having higher early-year cash flows tend to be preferred at lower discount rates.
• D) the discount rate and magnitude of cash flows do not affect internal rate of return.

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