Which of the Following Statements Is Correct

question 13

Multiple Choice

Which of the following statements is correct?

• A)One can find the "cross-over rate," or the discount rate at which two normal projects have the same NPV, by finding the IRR of the differences in the projects' yearly cash flows.
• B)If you calculate a project's MIRR and find it to be the same as the regular IRR, you can be sure you made a mistake.
• C)If a project's IRR is less than its required rate of return, then the discounted payback period will be less than the regular payback period.
• D)If a project has a cash outflow at t = 0 followed by a single cash inflow at t = 10, then the MIRR will be less than the regular IRR.
• E)If a project has a cash outflow at t = 0 followed by a single cash inflow at t = 10, then the MIRR will be greater than the regular IRR.

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost, indicating how well a company has controlled its labor costs.

Labor Efficiency Variance

The difference between the actual hours worked by employees to produce goods and the expected hours, used to measure workforce efficiency.

Variable Overhead Rate Variances

The difference between the actual variable overhead incurred and the standard variable overhead allocated to production, indicating cost control efficiency.

Lubricants

Oils, greases, and other substances used to reduce friction between mechanical parts.