Discussion
Which of the following would NOT resolve the difficulty of multiple rates of return?
Answer: C
Correct answer: choosing whichever root exceeds the required rate
The other three are legitimate: computing a modified rate, compounding the positives forward at a stated rate (which is how the modified rate is formed), and falling back on present worth all give a defensible answer. Picking whichever root happens to clear the hurdle is not analysis but selection of a convenient number, since no root is the project’s return.
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