Internal rate of Return MCQ (Multiple Choice Questions) PDF Download

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

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

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

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

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