Statements related to the internal rate of return

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Reference no: EM131925841

1. Megan has covered medical expenses of $15,500. Her health insurance policy has a #1,000 calendar year deductible, 20% coinsurance and $2,500 stop loss. What amount will insurance company pay of medical expenses?

A. $11,600

B. $12,000

C. $13,000

Please explain and show work.

2. Which of the following statements related to the internal rate of return (IRR) is correct?

In most instances, if an investment is attractive based on its IRR, it will have a negative NPV.

An investment should be undertaken whenever the discount rate exceeds its IRR.

It is a discount rate that makes the net present value (NPV) of all cash flows from a particular project positive.

The IRR is the best tool available for deciding between mutually exclusive investments.

The IRR calculates an investor's breakeven rate of return

Reference no: EM131925841

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