Which One of the Following Statements About IRR Is NOT

question 58

Multiple Choice

Which one of the following statements about IRR is NOT true?

• A) The IRR is the discount rate that makes the NPV greater than zero.
• B) The IRR is a discounted cash flow method.
• C) The IRR is an expected rate of return.
• D) None of the above.

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Definitions:

Variable Budget

A financial plan that adjusts for changes in the volume of activity, allowing for flexibility in spending.

Budgeted Production

Budgeted Production involves estimating the quantity of goods or services that a company plans to produce over a specific period as part of its operational and financial planning efforts.

Inventory Units

Units or quantities of stock items kept on hand by a business for the purpose of production or sales.

Projected Sales

An estimate of the amount of sales that a company expects to achieve in a future period, based on various forecasting methods and assumptions.