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To use internal rate of return (IRR) analysis to select between alternative projects, you should use...

To use internal rate of return (IRR) analysis to select between alternative projects, you should use which technique?

a)Simple investing

b)Net-investment test

c)Incremental investment analysis

d)Return-on-invested-capital

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Answer #1

IRR is the internal rate of return generated from the cash flows of the project. A conventional cash flows in a project will have one IRR and as many more IRRs as the number of sign changes. Here, there are no sign changes. It is expressed in percentage form.

Hence, correct option is D

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