Which of the following situations can lead to the IRR rule giving the same decision as...

Which of the following situations can lead to the IRR rule giving the same decision as the NPV rule?

Expert Solution

IRR- internal rate of return

NPV- net present value

both irr and npv give same result in decisions making of capital budgeting decisions

when npv is positive ( net present value of cash inflow from project is higher than net cash outflows)

and

irr is acceptable when irr of a particular project is higher than a cutt off rate

jeff jeffy answered 2 years ago

The IRR decision rule can be reversed because A. the IRR is greater than 100% B....

The IRR decision rule can be reversed because A. the IRR is greater than 100% B. the NPV rule is not the same as the IRR C. instead of an investment project it is a financing project D. the IRR is based on a mutually exclusive investment

Which of the followings may lead to the wrong decision if IRR is used as the...

Which of the followings may lead to the wrong decision if IRR is used as the investment decision criteria? When dealing with mutually exclusive projects. IRR never leads to the wrong decision. When dealing with independent projects with conventional cash flow pattern. When dealing with small independent projects When dealing with very large independent projects

Under what circumstances will the IRR and NPV rules lead to the same decision (accept/reject)? When...

Under what circumstances will the IRR and NPV rules lead to the same decision (accept/reject)? When might they conflict? (It is important to explain your answers with details or demonstrate your understanding by applying examples.) please this answer should not be from text book.

Which of the following is not a weakness of using the IRR rule to select among...

Which of the following is not a weakness of using the IRR rule to select among projects? Group of answer choices A)The IRR rule systematically prefers short term over long term projects. B)The IRR rule does not identify projects that add value. C)The IRR rule has no measure of scale.

The following is a payoff table giving costs for various situations. What decision would an optimist...

The following is a payoff table giving costs for various situations. What decision would an optimist make? State 1 State 2 State 3 Alternative 1 45 37 83 Alternative 2 16 59 72 Alternative 3 23 65 91 Alternative 4 44 33 55

1.in which of the following situations would you prefer to be giving a loan ? a...

1.in which of the following situations would you prefer to be giving a loan ? a interest rate 4 inflation 1 % b interest rate 9 inflation 7% c interest rate 3 inflation 4% d interest rate 8 inflation 2

Question 1 Which of the following can be explained by our ‘economic decision rule’ from chapter...

Question 1 Which of the following can be explained by our ‘economic decision rule’ from chapter 1? a) If MUx/Px < MUy/Py a consumer should consume more y and less x b) A firm maximizes profits when MR=MC c) All of these can be explained by the economic decision-making rule d) If MSB(x)> MSC(x) then society is producing/consuming an inefficient amount of good z e) No answer text provided. (wrong) Question 2 If a good exhibits a negative externality, which...

Which of the following statements is FALSE? a. When using the incremental IRR rule, you must...

Which of the following statements is FALSE? a. When using the incremental IRR rule, you must keep track of which project is the incremental project and ensure that the incremental cash flows are initially positive and then become negative. b. When the risks of two projects are different, only the NPV rule will give a reliable answer. c. Problems arise using the IRR method when the mutually exclusive investments have differences in scale. d. Picking one project over another simply...

If we apply the discounted payback decision rule to all projects, it will likely lead to...

If we apply the discounted payback decision rule to all projects, it will likely lead to ________________________. some positive net present value projects to be rejected the most liquid projects to be rejected in favor of the less liquid projects projects to be incorrectly accepted due to ignoring the time value of money a firm to become more long-term focused some projects to be accepted which would otherwise be rejected under the payback rule __________ is the best example of...

Which of the following three situations is least likely to occur at the same time as...

Which of the following three situations is least likely to occur at the same time as the other two situations? Why? a-Real GDP is less than potential GDP.   b-An economy in a strong, 5-year expansion.   c-An unemployment rate above the natural rate of unemployment.

Question