When evaluating two mutually exclusive investments, the best method to use is the:
A: modified internal rate of return.
B: net present value.
C: profitability index.
D: average accounting return.
E: internal rate of return.
A: modified internal rate of return.
B: net present value.
C: profitability index.
D: average accounting return.
E: internal rate of return.
举一反三
- When ( ) equals zero, the discount rate is the internal rate of return. A: Discounted Cash Flow B: Annual cash flow C: Payback period D: Net Present Value
- Compared with the net present value (NPV) method, the internal rate of return (IRR) method of evaluating investment projects:() A: is the preferred method for evaluating mutually exclusive projects. B: is not sensitive to the pattern or timing of the cash flows from the period. C: assumes that all cash flows from the project will be reinvested at the computed IRR.
- Which of the following is NOT a problem associated with the internal rate of return (IRR) method for making investment decisions:（） A: IRR and NPV criteria can give conflicting decisions for mutually exclusive projects. B: if the IRR is above the firm’ s cost of capital, the project should be rejected. C: The IRR method assumes cash flows are reinvested at the investment’ s internal rate of return.
- The internal rate of return (IRR) method and net present value (NPV) method of project selection will always provide the same accept or reject decision when:（） A: the projects are mutually exclusive. B: the projects are independent. C: the projects terminate within five years.
- In what way is the modified internal rate of return (MIRR) method better than the IRR method?