Question
Which of the following statements is incorrect regarding the IRR method? a. There may be more than one IRR for a project b. The IRR
Which of the following statements is incorrect regarding the IRR method?
a.
There may be more than one IRR for a project
b.
The IRR does not tell us which project increases shareholder wealth the most
c.
The IRR uses accounting profit
d.
The IRR is the discount rate that results in a zero NPV
Which of the following costs/expenses should be included in the cash flows of a potential investment, for the purposes of evaluating (appraising) the investment? I. Cost of material and labour used for manufacture of goods sold II. Interest repayments on any borrowing used to purchase assets III. Depreciation expense on assets purchased
a.
I
b.
I and II
c.
II and III
d.
I, II and III
If a firm is comfortably selling a lot more units of a product than it needs to break even, we can say that the firm
a.
is operating with a high level of gearing.
b.
is operating with a low level of gearing.
c.
has a low contribution margin
d.
has a high margin of safety
Which of the following costs/expenses should be included in the cash flows of a potential investment, for the purposes of evaluating (appraising) the investment? I. Cost of material and labour used for manufacture of goods sold II. Interest repayments on any borrowing used to purchase assets III. Depreciation expense on assets purchased
a.
I
b.
I and II
c.
II and III
d.
I, II and III
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