Which of the Following Statements About IRR Is NOT True

question 4

Multiple Choice

Which 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:

Capital Goods

Assets used by businesses to produce goods and services, such as machinery, buildings, and equipment, not intended for immediate sale but for productive use over time.

Population Growth

The increase in the number of individuals in a population, often measured by the rate at which the number of individuals increases in a specific time period, usually expressed as a percentage.

Productivity

The measure of the efficiency of production, often calculated as the ratio of outputs produced to inputs used in the production process.

Capital Goods

Long-lasting goods that are used in the production of other goods or services and are not consumed in the process.