The internal rate of return (IRR) of a project must be compared to its Blank______ in order to determine the acceptability of the project. Multiple choice question. real rate of return required rate of return profitability index accounting rate of return

n 0 1 2 3 4 5 6 7 8 9 10 A -$250 $60 $970 B -$200 $90 $90 $60 $60 Net Cashflow с -$70 $20 $10 $5 -$50 $60 $50 $40 $30 $20 $10 D -$300 $270 $250 -$129 -$20 $120 $40 E -$90 -$100 -$50 $0 $150 $150 $100 $100

Which of the following statement is correct Select one: a. A project is accepted when profitability index will be greater than one b. All statements are correct c. A project is accepted when net present value is greater than zero d. A project is accepted when payback period is less than the other project

If the net present value of a project is positive, the project earns a return that is Group of answer choices - equal to the required rate or return - greater than the required rate of return - equal to the accounting rate of return - greater than the accounting rate of return

Which of the following is/are true for the average accounting return method of project analysis? I. does not need a cutoff rate II. ignores time value of money II. is based on project's cash flows IV. easily obtainable information for computation Multiple Choice I only I, II, II, and IV

Use the information from the previous exercise to calculate the Internal Rate of Return on both projects and make a recommendation regarding which one to accept.

Which of the following statements is CORRECT?   a.  An NPV profile graph shows how a project's payback varies as the cost of capital changes.   b.  The NPV profile graph for a normal project will generally have a positive (upward) slope as the life of the project increases.   c.  An NPV profile graph is designed to give decision makers an idea about how a project's risk varies with its life.   d.  An NPV profile graph is designed to give decision makers an idea about how a project's contribution to the firm's value varies with the cost of capital.   e.  We cannot draw a project's NPV profile unless we know the appropriate WACC for use in evaluating the project's NPV. Provide explanation for the choice

Payback is best used to evaluate which types of project

When the net present value (NPV) and the internal rate of return (IRR) rankings conflict for mutually exclusive projects Blank______. Multiple choice question. accept the project with the higher IRR accept the project with the lower NPV accept the project with the lower IRR accept the project with the higher NPV

What should be done to calculate accurately a project's true IRR,?