An investment is acceptable if its IRR:

a.) is exactly equal to 100%

b.) exceeds the required return

c.) is exactly equal to zero

d.) is exactly equal to its net present value (NPV)

e.) is less than the required return

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Ronaldo MendozaLv10

15 Jan 2021

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Related questions

[14] An investment is acceptable if its average accounting return (AAR):
[A] exceeds the target AAR.
[B] is less than the target AAR.

[15] The discount rate that makes the net present value of an investment exactly equal to zero is called the internal rate of return.
[A] True
[B] False

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Mark the statements below as true or false:

-Because investors like dividends, the higher the company's dividend growth rate, the lower the company's cost of common equity.

-Both the profitability index (PI) and net present value (NPV) are based on the present value of all future free cash flows, but the PI is a relative measure while the NPV is an absolute measure of a project's desirability.

-If a project is acceptable using the NPV criteria, it will also be acceptable when using the profitability index and IRR criteria.

-If a project's IRR is equal to its required return, then the project's NPV is equal to zero and its PI is equal to one.

-In order to create value a corporation must earn a rate of return on its invested capital that is higher than the market's required rate of return on that invested capital.

If a project has NPV equal to zero, all of the following are true EXCEPT: a. IRR is equal to the required rate of return b. The projects cash outflow equals the present value of the cash inflows c. The project has no impact on firm value d. The project earns more than the required rate of return

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An investment is acceptable if its IRR: a.) is exactly equal to 100% b.) exceeds the required return c.) is exactly equal to zero d.) is exactly equal to its net present value (NPV) e.) is less than the required return

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An investment is acceptable if its IRR:

a.) is exactly equal to 100%

b.) exceeds the required return

c.) is exactly equal to zero

d.) is exactly equal to its net present value (NPV)

e.) is less than the required return