Which of the Following Statements Is CORRECT

question 76

Multiple Choice

Which of the following statements is CORRECT?

• A) One defect of the IRR method is that it does not take account of cash flows over a project's full life.
• B) One defect of the IRR method is that it does not take account of the time value of money.
• C) One defect of the IRR method is that it does not take account of the cost of capital.
• D) One defect of the IRR method is that it values a dollar received today the same as a dollar that will not be received until sometime in the future.
• E) One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself,and that assumption is often not valid.

---

Definitions:

Perfectly Price Discriminate

A theoretical pricing strategy where a seller charges the maximum possible price for each unit sold, capturing the entire consumer surplus.

Monopolist

A market player that is the sole provider of a particular good or service, possessing significant market power to influence prices and output levels.

Diamonds

A precious gemstone made of carbon, often used in jewelry for its brilliance and durability.

Sole Supplier

A market situation in which only one company provides a particular product or service, potentially leading to monopoly power and less competitive prices.