Which of the Following Statements Is CORRECT? Assume That the Project

question 91

Multiple Choice

Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.

• A) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
• B) The IRR calculation implicitly assumes that all cash flows are reinvested at the cost of capital.
• C) The IRR calculation implicitly assumes that cash flows are withdrawn from the business rather than being reinvested in the business.
• D) If a project has normal cash flows and its IRR exceeds its cost of capital, then the project's NPV must be positive.
• E) If Project A has a higher IRR than Project B, then Project A must have the lower NPV.

---

Definitions:

Alert

A state in which an individual is fully aware of and responsive to their environment, often used as an assessment criterion in healthcare.

Sleep deprivation

The condition of not obtaining an adequate amount of sleep, which can negatively affect mental and physical health.

Labor

The process of childbirth, starting from the onset of uterine contractions to the delivery of the baby and placenta.

Disoriented

A state of confusion regarding time, place, or identity, often resulting from psychological or physical causes.