Question

Tedder Mining has analyzed a proposed expansion project and determined thatthe internal rate of return is lower than the firm desires. Which one of thefollowing changes to the project would be most expected to increase the project'sinternal rate of return?A. decreasing the required discount rateB. increasing the initial investment in fixed assetsC. condensing the firm's cash inflows into fewer years without lowering the total amountof those inflowsD. eliminating the salvage valueE. decreasing the amount of the final cash inflow

Answer 1

Answer:

C. condensing the firm's cash inflows into fewer years without lowering the total amountof those inflows

Explanation:

Internal rate of return (IRR) is the rate of interest by which the gross current valuation of all cash flows from a venture or investment equal to nothing (both positively and negatively). Internal yield levels are used to determine the quality of a project or investment.