1)On a purely theoretical basis, NPV is the better approach to capital budgeting than IRR because NPV...
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Question:
1)On a purely theoretical basis, NPV is the better approach to capital budgeting than IRR because NPV implicitly assumes that any intermediate cash inflows generated by an investment are reinvested at the firm's cost of capital.
True
False
Rationale:
2)in general, projects with similar-sized investments and lower cash inflows in the early years tend to be preferred at higher discount rates.
True
False
Rationale:
3)The appeal of the IRR technique is due to the general disposition of business people to think in terms of rates of return rather than actual dollar returns.
True
False
Rationale:
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
Posted Date: