Which of the following is an advantage of the internal rate of return (IRR) rule? Multiple choice question. It is easy to understand and communicate. It can be applied to projects with non-conventional cash flows. It always gives multiple IRRs for non-conventional cash flows. It needs less input data than the NPV method.

Which of the following is an advantage of the internal rate of return (IRR) rule? Multiple choice question. It is easy to understand and communicate. It can be applied to projects with non-conventional cash flows. It always gives multiple IRRs for non-conventional cash flows. It needs less input data than the NPV method.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter11: Cash Flow Estimation And Risk Analysis

Section11.1: Identifying Relevant Cash Flows

Problem 3ST

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An advantage of the internal rate of return method is that a.it considers the time value of money. b.it can rank proposals of equal lives. c.it considers the cash flows of the investment. d.All of these choices are correct.
Differences between the ERR and the IRR include the following: a. The ERR will yield a unique solution (no multiple rates of return as in the IRR) b. In the ERR, funds recovered from the investment are assumed to earn returns equal to the MARR c. The ERR is always a value somewhere between the IRR and the MARR d. All of the above.
State whether the following statement true or false and provide a brief explanation
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An NPV analysis is one part of a complete captial investment analysis. What is the second part that must be completed if the first part is positive?
If the key ratios are expected to remain constant, the AFN equation can be used toforecast the need for external funds. Write out the equation and explain its logic.
What theorem is this a plain-language interpretation of? "Leaving an investment that loses money on average can't turn it into an investment that ever makes money on average, but it can make it lose less money on average." A. Stopwatch lemma B. Feynman-Kac C. Fundamental theorem of investment D. Process reduction E. Martingale replication F. Optional Sampling G. None of the other responses.
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Give an example of a liquid investment and an illiquid investment. Discuss why you consider each of them to be liquid or illiquid.
You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. If the discount rate decreases the it would lower the calculated value of the investment. Group of answer choices True False
What is meant by partitioning the internal rate of return? Why is this procedure meaningful?