The Internal Rate of Return Rule Can Result in the Wrong

question 13

Multiple Choice

The internal rate of return rule can result in the wrong decision if the projects being compared have:

• A)differences in scale.
• B)differences in timing.
• C)differences in NPV.
• D)A and B are correct.

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Definitions:

Conditioned Responding

A learning process in which an individual develops a response to a previously neutral stimulus by associating it with another stimulus that already elicits a response.

Stimulus Discrimination

The ability to distinguish between different stimuli, responding only to the specific stimulus that is conditioned.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of no exposure to the conditioned stimulus.