When reviewing the net present value profile for a project the IRR will be a point...
When reviewing the net present value profile for a project
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the IRR will be a point on the horizontal axis line where NPV = 0. |
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the IRR will always be a point on the horizontal axis = 0 |
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the higher the discount rate, the higher the NPV. |
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the higher the discount rate, the higher the IRR. |
Homework Answers
Please find below the solution.. let me know if you need any clarification..
Correct answer is option :
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the IRR will be a point on the horizontal axis line where NPV = 0. |
IRR is the rate at which NPV of the project is ZERO. NPV will be higher if discount rate is lower and vice versa. IRR has nothing to do with discount rate.
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When reviewing the net present value profile for a project
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First Blank: always, sometimes, never
Second Blank: IRR, MIRR, required rate of return
Third Blank: IRR, MIRR, required rate of return
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Help
and verified and be clear.
The net present value (NPV) and internal rate of return (IRR) methods of investment analysis are interrelated and are sometimes used together to make capital budgeting decisions. Consider the case of Blue Hamster Manufacturing Inc.: Last Tuesday, Blue Hamster Manufacturing Inc. lost a portion of its planning and financial data when both its main and its backup servers crashed. The company's CFO remembers that the internal rate of return (IRR) of Project Lambda is...
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