2. In what ways can the IRR make you give a flawed decision and what relationship the NVP have with the IRR?
4. What is the best way to select a project that has resource restrictions? Explain.
6. Why must opportunity costs be included in cash flows, while sunk costs and interest expense must not?
8. Compare and contrast the uses of break-even analysis and sensitivity analysis in evaluating project risk.
10. What are the effects of coupon rate to the sensitivity of a bond price and to changes in interest rates?
12. What is the relationship between a corporate bond's expected return and the yield to maturity? In your answer, define default risk and explain how these rates incorporate default risk
14. 
    

Answer rating: 100% (QA)

The Internal Rate of Return IRR can sometimes lead to flawed decisions due to its inherent assumptions particularly when evaluating mutually exclusive projects with nonconventional cash flows One flaw ... View the full answer