In financial management, the 'Net Present Value' (NPV) of a project is ₹50,000 at a discount rate of 10%, and ₹(20,000) at a discount rate of 15%. What is the approximate Internal Rate of Return (IRR)?
A: A current ratio of 2:1 is generally considered ideal. R: It indicates that current assets are twice the current liabilities, ensuring good short-term liquidity. Choose the correct option.
A.A is false but R is true
B.Both A and R are true but R is NOT the correct explanation of A
C.A is true but R is false
D.Both A and R are true and R is the correct explanation of A
Explanation:
A current ratio of 2:1 is a standard benchmark for short-term solvency. It means the firm has double the current assets to cover its current liabilities, providing a safety margin. R correctly explains A.
No comments yet. Be the first to start the discussion!