Which of the Following Statements Is CORRECT

question 25

Multiple Choice

Which of the following statements is CORRECT?

• A) An externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations.If the project would have a favorable effect on other operations,then this is not an externality.
• B) An example of an externality is a situation where a bank opens a new office,and that new office causes deposits in the bank's other offices to decline.
• C) The NPV method automatically deals correctly with externalities,even if the externalities are not specifically identified,but the IRR method does not.This is another reason to favor the NPV.
• D) Both the NPV and IRR methods deal correctly with externalities,even if the externalities are not specifically identified.However,the payback method does not.
• E) Identifying an externality can never lead to an increase in the calculated NPV.

---

Definitions:

Genetically Modified Plants

Plants that have been genetically altered using biotechnology to possess traits that are not naturally theirs, such as resistance to pests or tolerance to herbicides.

Protein-Coding Genes

Genes that contain the instructions for producing proteins, which are crucial for various cellular functions.

Gel Electrophoresis

A technique used to separate DNA, RNA, or proteins based on their size and charge by applying an electric field to a gel matrix.

Template Strand

The strand of DNA that serves as a guide for the synthesis of complementary RNA molecules during transcription.