The internal rate of return: A)Does not require a predetermined discount rate B)
ID: 2484506 • Letter: T
Question
The internal rate of return:
A)Does not require a predetermined discount rate
B) Is often used to rank investment proposals
C)May be compared to the cost of capital in project evaluation
D)All of the above .
A project’s ________________ is computed as the present value of project related cash inflows and outflows.
a) Accounting rate of return
b)Internal rate of return
C)Net present value
D)Present value index .
Question 60
Which of the following is needed to compute a project's net present value?
a) A computer
b)Accounting rate of return
c)Discount rate
d) Internal rate of return
a) A computer
b)Accounting rate of return
c)Discount rate
d) Internal rate of return
Explanation / Answer
Answer: D)All of the above .
Because The internal rate of return calculates a discount rate at which the net present value of the project would be zero. It can be used to rank projects and can be compared to the cost of capital.