Which of the Following Statements Is CORRECT

question 103

Multiple Choice

Which of the following statements is CORRECT?

• A) The NPV method assumes that cash flows will be reinvested at the risk-free rate, while the IRR method assumes reinvestment at the IRR.
• B) The NPV method assumes that cash flows will be reinvested at the cost of capital, while the IRR method assumes reinvestment at the risk-free rate.
• C) The NPV method does not consider all relevant cash flows, particularly cash flows beyond the payback period.
• D) The IRR method does not consider all relevant cash flows, particularly cash flows beyond the payback period.
• E) The NPV method assumes that cash flows will be reinvested at the cost of capital, while the IRR method assumes reinvestment at the IRR.

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Definitions:

Neurotransmitter

Chemical substances in the brain that transmit signals from one neuron to another.

Excitatory Response

A reaction in neural tissue that increases the likelihood of a neuron firing an action potential, typically facilitated by neurotransmitters.

Voltage Shift

A change in the electrical potential difference between two points, which can affect the flow of electricity in a circuit.

Excitatory Effect

A response in which a neurotransmitter increases the likelihood that a neuron will fire an action potential.