Which of the following statements is CORRECT?
A) The discounted payback method eliminates all of the problems associated with the payback method.
B) When evaluating independent projects, the NPV and IRR methods often yield conflicting results regarding a project's acceptability.
C) To find the MIRR, we discount the TV at the IRR.
D) A project's NPV profile must intersect the X-axis at the project's cost of capital.
E) The IRR method appeals to some managers because it gives an estimate of the rate of return on projects rather than a dollar amount, which the NPV method provides.

Question

Quizplus · Accepted Answer

The IRR (Internal Rate of Return) method is indeed appealing to some managers because it provides a rate of return, which can be more intuitive or easier to compare across projects, unlike the NPV (Net Present Value) method that provides a dollar amount indicating the value added by the project.

Which of the Following Statements Is CORRECT