In independent projects evaluation, the results of internal rate of return and net present value lead to __________?
Correct answer: C. same decisions
- A. cash flow decision
- B. cost decision
- C. same decisions
- D. different decisions
Explanation
For independent projects with conventional cash flows, NPV and IRR normally give the same accept-or-reject decision because both compare project returns with the required rate of return. Differences mainly arise when projects are mutually exclusive or cash flows are unconventional.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
In internal rate of returns, the discount rate which forces the net present values to become zero is classified as ___________?
The graph which is plotted for projected net present value and capital rates is called ___________?
The set of projects or set of investments to maximize the firm value is classified as __________?
In capital budgeting, an internal rate of return of the project is classified as its __________?
Other factors held constant, but the lesser project liquidity is because of __________?
In cash flow analysis, the two projects are compared by using common life, is classified as _________?