Which of the Following Is $\textbf{ not }$

question 22

Multiple Choice

Which of the following is $\textbf{ not }$ an assumption of the internal rate of return model?

• A)The amount and timing of all cash flows is known exactly
• B)All cash flows occur at the end of the year
• C)Cash inflows from the project are reinvested in another project earning a return equal to the internal rate of return
• D)All of these ans choices are assumptions of the internal rate of return model.

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Definitions:

Revenue Recognition Principle

An accounting principle that dictates the conditions under which revenue is recognized and recorded, usually when it is earned and realizable.

Cash

Liquid currency and assets readily convertible to cash that are used by businesses to conduct transactions, pay expenses, and provide financial buffers.

Deferrals

Transactions where the recognition of revenue or expenses is postponed to future accounting periods.

Recognition

The process of formally recording or incorporating an item into the financial statements of an entity.