Ambrose's utility function is U(x, y) x 4y1/2.The price of x is $1 and the price of y is $2.If his income rises from $100 to $150, his consumption of y increases by more than 10% but less than 50%.
Costs incurred by the franchisor to provide initial and continuing services (for example,counseling by a registered dietician or advertising)are expensed in the same periods as the franchise revenue in accordance with the matching principle.
Which statement regarding the IRR method is correct?
A) One defect of the IRR method is that it does not take account of cash flows over a project's full life. B) One defect of the IRR method is that it does not take account of the time value of money. C) One defect of the IRR method is that it does not take account of the cost of capital. D) One defect of the IRR method is that it does not assume that the cash flows to be received from a project can be reinvested at a rate other than the IRR itself.