If a project with conventional cash flows has an IRR equal to the required return, then:O The profitability index is one.O The IRR must be zero.O The project should be accepted, as the NPV is greater than zero.O The payback period is less than the maximum acceptable period.The NPV is negative.

IRR is the actual rate of return earned on the project while the required return is the discount…

If a project with conventional cash flows has an IRR equal to the required return, then: O The profitability index is one. O The IRR must be zero. The project should be accepted, as the NPV is greater than zero. O The payback period is less than the maximum acceptable period. The NPV is negative.

If a project with conventional cash flows has an IRR equal to the required return, then: O The profitability index is one. O The IRR must be zero. The project should be accepted, as the NPV is greater than zero. O The payback period is less than the maximum acceptable period. The NPV is negative.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 16MCQ: Using IRR, a project is rejected if the IRR a. is equal to the required rate of return. b. is less...

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Question

If a project with conventional cash flows has an IRR equal to the required return, then:
O The profitability index is one.
O The IRR must be zero.
O The project should be accepted, as the NPV is greater than zero.
O The payback period is less than the maximum acceptable period.
The NPV is negative.

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