The Internal Rate of Return (IRR) Is Often Preferred by Managers

Multiple Choice

The internal rate of return (IRR) is often preferred by managers over the net present value (NPV) because the IRR:

A) Is more reliable given unconventional cash flows.
B) Is the discount rate that maximizes net profits.
C) Is contingent upon the current market rates of return.
D) Reveals the discount rate that maximizes the net present value.
E) Is expressed as a rate while the NPV is expressed in dollar terms.