Answer the following statements true (T) or false (F)
1. When the internal rate of return is the same as the required rate of return, the net present value of an investment will be positive.
2. The internal rate of return (IRR) is the rate of return, based on discounted cash flows, of a capital investment.
3. If an investment's internal rate of return is higher than the required rate of return, the company should reject the investment.
4. The discounted cash flow methods of evaluating capital investments are superior because they consider both the time value of money and the profitability of the investment.
5. When evaluating a potential investment, managers should use only one measure for making a sound investment decision.
6. Many service, merchandising, and manufacturing firms use discounted cash flow methods to make capital investment decisions.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. FALSE
6. TRUE
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