following a. The IRR is the discount rate that equates the present value of a project's expected cash inflows with its net present value. b. The IRR is the discount rate that makes the net present value of a project equal to zero. c. The IRR is the maximum discount rate that will give a non-negative net present value. d. Consider an investment opportunity that costs P10,000 and promises to pay a single lump sum of P13,000 three years from now. In this situation, invested capital will increase over the life of the investment.

International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter16: Country Risk Analysis
Section: Chapter Questions
Problem 20QA
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33. Which of the following statements is false?
a.
The IRR is the discount rate that equates the present value of a project's expected cash inflows with its
net present value.
b.
The IRR is the discount rate that makes the net present value of a project equal to zero.
c. The IRR is the maximum discount rate that will give a non-negative net present value.
d.
Consider an investment opportunity that costs P10,000 and promises to pay a single lump sum of
P13,000 three years from now. In this situation, invested capital will increase over the life of the
investment.
Transcribed Image Text:33. Which of the following statements is false? a. The IRR is the discount rate that equates the present value of a project's expected cash inflows with its net present value. b. The IRR is the discount rate that makes the net present value of a project equal to zero. c. The IRR is the maximum discount rate that will give a non-negative net present value. d. Consider an investment opportunity that costs P10,000 and promises to pay a single lump sum of P13,000 three years from now. In this situation, invested capital will increase over the life of the investment.
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