Which of the Following Is a Major Difference Between IRR

question 15

Multiple Choice

Which of the following is a major difference between IRR and NPV?

• A) NPV assumes that cash flows from projects are invested at the required rate of return while IRR assumes they are reinvested at the rate of return of that particular project.
• B) IRR assumes that cash flows from projects are invested at the required rate of return while NPV assumes they are reinvested at the rate of return of that particular project.
• C) NPV also gives multiple answers under some circumstances.
• D) Both a and b.
• E) Both b and c.

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Definitions:

Government System

The structured set of political, legal, and administrative institutions that govern a country.

Employment-Based

Pertaining to benefits, systems, or methodologies that are founded on or relate to an individual's employment status or work-life.

Employment-Based Insurance

Health insurance provided by an employer as part of a benefits package to employees, often covering a portion of healthcare costs.

Favorable Tax Treatment

Tax policies that are advantageous to businesses or individuals, often involving lower rates or specific deductions.