Internal rate of Return Multiple Choice Questions with Answers – PDF Download

MCQ 1: In capital budgeting, an internal rate of return of the project is classified as its:

1. external rate of return
2. internal rate of return
3. positive rate of return
4. negative rate of return

MCQ 2: In internal rate of returns, the discount rate which forces the net present values to become zero is classified as:

1. positive rate of return
2. negative rate of return
3. external rate of return
4. internal rate of return

MCQ 3: A modified internal rate of return is considered as present value of costs and is equal to:

1. p.v of hurdle rate
2. fv of hurdle rate
3. p.v of terminal value
4. fv of terminal value

MCQ 4: A discount rate which is equal to the present value of TV to the project cost present value is classified as:

1. negative internal rate of return
2. modified internal rate of return
3. existed internal rate of return
4. relative rate of return

MCQ 5: In calculation of internal rate of return, an assumption states that received cash flow from the project must:

1. be reinvested
2. not be reinvested
3. be earned
4. not be earned