Internal rate of return rule can result in wrong decision

Assignment Help Financial Management

Reference no: EM131928687

1. The internal rate of return rule can result in the wrong decision if:

the projects being compared are independent.

the projects being compared have normal cash flows.

the projects being compared are independent and have normal cash flows.

the projects being compared are mutually exclusive.

2. When attempting to reduce your overall tax liability, you would rather have a tax deduction than a tax credit.

True

False

3. Which of the following statements is FALSE?

The IRR investment rule will identify the correct decision in many, but not all, situations.

The IRR is the rate of return that makes the NPV equal to zero.

There are situations in which multiple IRRs exist.

The IRR decision rule will always identify the correct investment decision because it ignores the time value of money.

Reference no: EM131928687

Questions Cloud

Analyse qualitative data in form of interview transcripts : The purpose of this assignment is to analyse secondary qualitative data in the form of interview transcripts and prepare a report on the analysis approach

Discuss about the semiannual compounding periods : You find a zero coupon bond with a par value of $10,000 and 18 years to maturity. If the yield to maturity on this bond is 3.96 percent.

Describe how immunizations affect the lymphatic system : Describe how immunizations affect the lymphatic system and how they affect the immune system. What is actually happening to their immune system?

Propose a technological solution for the clarion school : Propose a technological solution(s) for the Clarion School for Boys, Inc. to reduce its operation costs and other resource usage.

Internal rate of return rule can result in wrong decision : The internal rate of return rule can result in the wrong decision.

What would be the total return of the bond in percent : A 6.85 percent coupon bond with 22 years left to maturity is priced to offer a 5.4 percent yield to maturity.

Thoughts on the global supply chain management : Enter your reflective thoughts on the global supply chain management. Why do you think supply chain management is important in a global context?

Indecisive about purchasing a product or service : Think about a time when you were indecisive about purchasing a product or service. What caused your indecisiveness?

What constraints could there be : You are a 65-year-old investor with the following demographics: retired but you do some part-time consulting, you own your home, kids are grown.

User Account

All Pages