Which of the Following Statements Is Correct

question 52

Multiple Choice

Which of the following statements is correct?

• A) There can never be a conflict between NPV and IRR decisions if the decision is related to a normal, independent project, i.e., NPV will never indicate acceptance if IRR indicates rejection.
• B) To find the MIRR, we first compound CFs at the regular IRR to find the TV, and then we discount the TV at the cost of capital to find the PV.
• C) The NPV and IRR methods both assume that cash flows are reinvested at the cost of capital. However, the MIRR method assumes reinvestment at the MIRR itself.
• D) If you are choosing between two projects which have the same cost, and if their NPV profiles cross, then the project with the higher IRR probably has more of its cash flows coming in the later years.
• E) A change in the cost of capital would normally change both a project's NPV and its IRR.

---

Definitions:

Class

A blueprint from which individual objects are created in object-oriented programming.

Data

Information processed or stored by a computer, comprising characters, numbers, or other items that can be manipulated.

Operations

Refers to the mathematical and logical computations that can be performed on data, such as addition, subtraction, and comparison.

Mixed Expression

Refers to an expression in programming that contains different types of operands, such as combining integers and floats in calculations.