The Internal Rate of Return of a Project Is the Rate

question 14

Multiple Choice

The internal rate of return of a project is the rate that leads to a net present value that is

• A)as low as will be accepted by management.
• B)zero.
• C)high enough for management to accept.
• D)as high as possible.

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Definitions:

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Operating Cycle

The average period of time between the purchase of goods or services and the receipt of cash from sales, typical in the context of a company's day-to-day operations.

APB Opinion No.22

A guideline issued by the Accounting Principles Board that requires companies to disclose their accounting policies in their financial statements.