Which of the Following Statements Is Correct

question 9

Multiple Choice

Which of the following statements is correct?

• A) Because discounted payback takes account of the cost of capital, a project's discounted payback is normally shorter than its regular payback.
• B) The NPV and IRR methods use the same basic equation, but in the NPV method the discount rate is specified and the equation is solved for NPV, while in the IRR method the NPV is set equal to zero and the discount rate is found.
• C) If the cost of capital is less than the crossover rate for two mutually exclusive projects' NPV profiles, a NPV/IRR conflict will not occur.
• D) If you are choosing between two projects which have the same life, and if their NPV profiles cross, then the smaller project will probably be the one with the steeper NPV profile.
• E) If the cost of capital is relatively high, this will favor larger, longer-term projects over smaller, shorter-term alternatives because it is good to earn high rates on larger amounts over longer periods.

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Definitions:

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The observation that the number of transistors in a dense integrated circuit doubles approximately every two years, leading to continuous increases in computing power.

Fat Client

A computer that typically has its own CPU, storage, and network connectivity, and can perform the bulk of processing tasks independently of a server.

Thin Client

A minimal and low-performance computer that relies on a network connection to a central server for processing and storage tasks.

Wearable Computer

A miniature computer worn by a person allowing the users to multitask.