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Certified Healthcare Financial Professional (CHFP) Questions 131–135 (page: 28)

Updated On: 9-Feb-2026

The rate of return on an investment that makes the net present value equal to $0, after all cash flows have been discounted at the same rate is called:

  1. External rate of return
  2. Discounted rate of return
  3. Invested rate of return
  4. Internal rate if return

Answer(s): D



In contrast to excel's NPV function, the IRR function includes the final investments as one of the entries in the function.

  1. True
  2. False

Answer(s): B



Required rate of return is:

  1. An organization's minimally acceptable internal rate of return on any investment to justify an initial investment.
  2. An organization's minimally rejected internal rate of return on any investment to justify a final investment.
  3. An organization's maximally accepted external rate of return on any investment to justify an initial investment.
  4. An organization's maximally rejected external rate of return on any investment to justify a final investment.

Answer(s): A



Which of the following is NOT the strength of the IRR analysis?

  1. Consider all relevant cash flows of the investment project
  2. Can generate multiple rates of return if future cash flows are estimates
  3. Time value of money-based approach
  4. Widely used by practitioners and easily understood

Answer(s): B



Which of the following is NOT the weakness of the IRR analysis?

  1. Discounts at the cost of capital
  2. Assumes reinvestment of proceeds at the internal rate of return
  3. Estimates may be difficult to develop
  4. Can generate multiple rates of return if future cash flows are estimates

Answer(s): A



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