Question

Which of the following statements about Internal Rate of Return is not true?

A. The IRR is that discount rate that causes the NPV of the investment to equal zero.

B. The IRR computation takes into consideration the time value of money.

C. The investment is rejected if IRR< the required rate of return

D. IRR to measure return assumes that all income earned over the investment horizon reinvested at the cost of capital.

E. None of the above

Answer 1

D. IRR to measure return assumes that all income earned over the investment horizon reinvested at the cost of capital

IRR to measure return assumes that all income earned over the investment horizon reinvested at IRR