The two fatal flaws of the internal rate of return rule are:
A) arbitrary determination of a discount rate and failure to consider initial expenditures.
B) arbitrary determination of a discount rate and failure to correctly analyze mutually
Exclusive investment projects.
C) arbitrary determination of a discount rate and the multiple rate of return problem.
D) failure to consider initial expenditures and failure to correctly analyze mutually exclusive
Investment projects.
E) failure to correctly analyze mutually exclusive investment projects and the multiple rate of
Return problem.
Correct Answer:
Verified
Q42: The payback period rule is a convenient
Q48: A project will have more than one
Q50: The investment decision rule that relates average
Q51: Internal rate of return: I.handles the the
Q52: The payback period rule:
A)discounts cash flows.
B)ignores initial
Q54: The discounted payback period rule:
A)considers the time
Q55: The shortcoming(s) of the average accounting return
Q56: The payback period rule:
A) determines a cutoff
Q57: Accepting positive NPV projects benefits the shareholders
Q58: The problem of multiple IRRs can occur
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