Which of the following is true? IRR is the only measure that investors focus on when analysing the returns of a deal. IRR is only impacted by the timing of cash flows, and so is not a good measure of profitability. It is always true that the higher the risk of an investment, the higher the IRR that investment will achieve. IRR is one of a collection of measures that investors focus on, including profit and equity multiple (and other factors depending on the asset class).
Which of the following is true? IRR is the only measure that investors focus on when analysing the returns of a deal. IRR is only impacted by the timing of cash flows, and so is not a good measure of profitability. It is always true that the higher the risk of an investment, the higher the IRR that investment will achieve. IRR is one of a collection of measures that investors focus on, including profit and equity multiple (and other factors depending on the asset class).
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Which of the following is true?
IRR is the only measure that investors focus on when analysing the returns of a
deal.
IRR is only impacted by the timing of cash flows, and so is not a good measure of
profitability.
It is always true that the higher the risk of an investment, the higher the IRR that
investment will achieve.
IRR is one of a collection of measures that investors focus on, including profit and
equity multiple (and other factors depending on the asset class).
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