Which of the following statements is FALSE?
A: The payback investment rule is based on the notion that an opportunity that pays back its initial investments quickly is a good idea.
B: An internal rate of return (IRR) will always exist for an investment opportunity.
C: A net present value (NPV) will always exist for an investment opportunity.
D: In general, there can be as many internal rates of return (IRRs) as the number of times the project's cash flows change sign over time.
A: The payback investment rule is based on the notion that an opportunity that pays back its initial investments quickly is a good idea.
B: An internal rate of return (IRR) will always exist for an investment opportunity.
C: A net present value (NPV) will always exist for an investment opportunity.
D: In general, there can be as many internal rates of return (IRRs) as the number of times the project's cash flows change sign over time.
举一反三
- 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.
- 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.
- Internal Rate of Return (IRR) is the discount rate which yields a zero ( ) A: Discounted Cash Flow B: Annual cash flow C: Payback period D: Net Present Value
- 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.
- A capital investment’s internal rate of return( ). A: Must exceed the cost of capital in order for the firm to accept the investment. B: C: Statements c and d are correct. D: Changes when the cost of capital changes. E: Is similar to the yield to maturity on a bon F: Is equal to the annual net cash flows divided by one half of the project’s cost when the cash flows are an annuity.