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Questions and Answers
Which of the following is a common use of IRR in capital planning?
Which of the following is a common use of IRR in capital planning?
- Evaluating employee performance
- Analyzing market trends for stock investments
- Calculating interest rates for loans
- Comparing profitability of new operations vs. expanding existing ones (correct)
When might IRR not be adequate for longer-term projects?
When might IRR not be adequate for longer-term projects?
- When discount rates are expected to vary (correct)
- When investment returns are guaranteed
- When the project involves multiple stakeholders
- When the project is low-risk
What is a common use of IRR for individuals when making financial decisions?
What is a common use of IRR for individuals when making financial decisions?
- Evaluating different insurance policies using their premiums and death benefits (correct)
- Determining employee benefits packages
- Analyzing market trends for stock investments
- Calculating mortgage interest rates
