Which of the Following Statements Is Incorrect

question 17

Multiple Choice

Which of the following statements is incorrect?

• A) Assuming a project has normal cash flows, the NPV will be positive if the IRR is less than the cost of capital.
• B) If the multiple IRR problem does not exist, any independent project acceptable by the NPV method will also be acceptable by the IRR method.
• C) If IRR = r (the cost of capital), then NPV = 0.
• D) NPV can be negative if the IRR is positive.
• E) The NPV method is not affected by the multiple IRR problem.

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Definitions:

General Ledger

A comprehensive record of all financial transactions within an organization, serving as the foundation for a company's financial statements.

Cash Payments Journal

A financial journal that records all cash outflows or payments made by a business, including expenses, debt payments, and purchases.

Credit To Cash

A transaction in accounting where a credit sale is paid off, converting receivables into cash.

Accounts Payable

Liabilities of a business that represent money owed to suppliers or creditors for goods and services received.