单选题 Which of the following statements regarding the internal rate of return (IRR) is most accurate? The IRR: A. assumes that the reinvestment rate of the cash flows is the cost of capital. B. ignores the time value of money. C. and the net present value (NPV) method lead to the same accept/reject decision for independent projects.

【正确答案】 C

【答案解析】NPV and IRR lead to the same decision for independent projects, not necessarily for mutually exclusive projects. IRR assumes that cash flows are reinvested at the IRR rate. IRR does not ignore time value of money (the payback period does), and the investor may find multiple IRRs if there are sign changes after time zero (i. e. negative cash flows after time zero).