A manager will prefer the IRR rule over the NPV rule if the manager:
A) Prefers to talk in terms of rates of return.
B) Can accurately forecast future cash flows.
C) Dislikes the discounted payback analysis.
D) Also prefers use of payback analysis.
E) Is considering mutually exclusive projects.

Question

Quizplus · Accepted Answer

The IRR (Internal Rate of Return) rule is preferred by managers who like to discuss investments in terms of rates of return, as it directly provides a percentage return expected from the project, making it easier to compare with the company's required rate of return or other investment opportunities.

A Manager Will Prefer the IRR Rule Over the NPV