Technical problems associated with the internal rate of return include: a. the possibility of multiple IRRs, which rarely present practical difficulties b. the assumption that all cash flows are reinvested at the IRR c. neither of the above d. both of the above

IRR (Internal Rate of Return): It is the rate of return that makes the net present value of the…

Answered: echnical problems associated with the…

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echnical problems associated with the internal rate of return include:

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter1: Multinational Financial Management: An Overview

Section: Chapter Questions

Problem 2ST

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Technical problems associated with the internal rate of return include:

		a. the possibility of multiple IRRs, which rarely present practical difficulties
		b. the assumption that all cash flows are reinvested at the IRR
		c. neither of the above
		d. both of the above

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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