When evaluating projects using internal rate of return,
A. projects having lower early­year cash flows tend to be preferred at higher discount rates.
B. projects having higher early­year cash flows tend to be preferred at higher discount rates.
C. projects having higher early­year cash flows tend to be preferred at lower discount rates.
D. the discount rate and magnitude of cash flows do not affect internal rate of return.
Answer:B
When evaluating projects using internal rate of return,
A. projects having lower early­year cash flows tend to be preferred at higher discount rates. B. projects having higher early­year cash flows tend to be preferred at higher discount rates. C. projects having higher early­year cash flows tend to be preferred at lower discount rates. D. the discount rate and magnitude of cash flows do not affect internal rate of return.