The Internal Rate of Return Method Is Not Subject to the Limitations

question 133

Multiple Choice

The internal rate of return method is not subject to the limitations of the net present value method when comparing projects with different amounts invested because:

• A)The internal rate of return is expressed as a percent rather than the absolute dollar value of present value.
• B)The internal rate of return is expressed as an absolute dollar value rather than the percent of net present value.
• C)The internal rate of return reflects the time value of money rather than the absolute dollar value of present value.
• D)The internal rate of return is expressed as an absolute dollar value rather than the time value of money used in net present value.
• E)The internal rate of return is expressed as a percent rather than the accrual income method used in net present value.

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