Which of the Following Statements Is CORRECT

question 52

Multiple Choice

Which of the following statements is CORRECT?

• A) One advantage of the NPV over the IRR is that NPV assumes that cash flows will be reinvested at the cost of capital, whereas IRR assumes that cash flows are reinvested at the IRR.The NPV assumption is generally more appropriate.
• B) One advantage of the NPV over the MIRR method is that NPV takes account of cash flows over a project's full life whereas MIRR does not.
• C) One advantage of the NPV over the MIRR method is that NPV discounts cash flows whereas the MIRR is based on undiscounted cash flows.
• D) Since cash flows under the IRR and MIRR are both discounted at the same rate (the cost of capital), these two methods always rank mutually exclusive projects in the same order.
• E) One advantage of the NPV over the IRR is that NPV takes account of cash flows over a project's full life whereas IRR does not.

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Definitions:

Colors

Properties of objects visible due to the different ways objects reflect or emit light, perceived by the human eye and brain.

Motion

The action or process of moving or being moved, often discussed in the context of physics to describe the change in position of an object relative to time.

Pruning

In neuroscience, pruning is the process by which extra neurons and synaptic connections are eliminated over time to increase the efficiency of neuronal transmissions.

Neural Connections

The links between neurons in the brain, which are created, strengthened, or weakened through experiences and learning.