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    Question

    Which is true about IRR? i. It is used in capital

    budgeting measuring the profitability of potential investments ii. It is that discount rate which makes the net present value (NPV) of all cash flows equal to zero iii. IRR cannot be calculated analytically, and must instead be calculated either through trial-and-error or using software programmed to calculate IRR iv. Higher the IRR, more desirable the project to undertake
    A Only i and ii Correct Answer Incorrect Answer
    B Only i, ii and iv Correct Answer Incorrect Answer
    C Only ii, iii and iv Correct Answer Incorrect Answer
    D Only i, ii and iii Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    The correct answer is E

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