A Project Manager Is Using the Internal Rate of Return

question 53

Multiple Choice

A project manager is using the internal rate of return method to make the final decision on which project to undertake.Which of these four projects has the highest internal rate of return?

• A)$25,000 initial outlay with $10,000 cash inflows during the following five years
• B)$12,500 initial outlay with $10,000 cash inflows during the following five years
• C)$25,000 initial outlay with $5,000 cash inflows during the following five years
• D)$12,500 initial outlay with $5,000 cash inflows during the following five years

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers.

Perfectly Elastic

A demand situation where a small change in price leads to an infinite change in the quantity demanded.

Price-Elasticity Of Demand

A way to quantify the effect price changes have on the demand for a good.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specified period.