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The internal rate of return of a capital investment Changes when the cost of capital changes. Is equal to the annual net cash flows divided
The internal rate of return of a capital investment
- Changes when the cost of capital changes.
- Is equal to the annual net cash flows divided by one half of the project's cost when the cash flows are an annuity.
- Must exceed the cost of capital in order for the firm or investor to accept the investment.
- Is similar to the yield to maturity on a bond.
- Answers c and d are both correct.
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Public Finance A Contemporary Application of Theory to Policy
Authors: David N Hyman
11th edition
9781305474253, 1285173953, 1305474252, 978-1285173955
