If a Project Has an Internal Rate of Return of 25

question 42

Multiple Choice

If a project has an internal rate of return of 25% and a negative net present value,which of the following statements is true regarding the discount rate used for the net present value computation?

• A)The required rate of return must have been 0%.
• B)The required rate of return must have been equal to 25%.
• C)The required rate of return must have been less than 25%.
• D)The required rate of return must have been greater than 25%
• E)None of the answer choices is correct.

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Definitions:

CEOs

Chief Executive Officers, the highest-ranking individuals in a company, responsible for making major corporate decisions, managing operations, and communicating with the board of directors.

United States

A federal republic in North America comprising 50 states, a federal district, and various territories, known for its large economy and influential role in global affairs.

Japan

An island nation in East Asia, known for its rich cultural heritage, technological innovation, and significant economic power.

Economies of Scale

Cost advantages achieved when an enterprise increases production and efficiency, reducing the cost per unit.