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22 May, 08:16

The internal rate of return of a capital investment Select one:

A. Changes when the cost of capital changes.

B. Is equal to the annual net cash flows divided by one half of the project's cost when the cash flows are an annuity.

C. Must exceed the cost of capital in order for the firm to accept the investment.

D. Is similar to the yield to maturity on a bond.

E. Answers c and d are correct.

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  1. 22 May, 08:28
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    E. Answers c and d are correct.

    Explanation:

    C. Must exceed the cost of capital in order for the firm to accept the investment. Because in case of being lower than the cost of capital would be convenient to invest in something riskless.

    D. Is similar to the yield to maturity on a bond. As the calculation of any rate of return is all about the expected cash flow.
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