Profitability ratio was equal to internal rate of return

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Reference no: EM13956136

You are considering a project with the following data: IRR = 8.7 percent; PI = .98; NPV = -$393; Payback period = 2.44 years. Which one of the following statements is correct given this information?

The discount rate used in computing the net present value must have been less than 8.7 percent.

The discounted payback period will have to be less than 2.44 years.

The discount rate used to compute the profitability ratio was equal to the internal rate of return.

The required rate of return must be greater than 8.7 percent.

This project should be accepted based on the profitability ratio.

Reference no: EM13956136

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