Which of the Following Statements Is Most Correct

question 74

Multiple Choice

Which of the following statements is most correct?

• A) If a project's internal rate of return (IRR) exceeds the cost of capital, then the project's net present value (NPV) must be positive.
• B) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
• C) The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the cost of capital.
• D) Answers a and c are correct.
• E) None of the answers above is correct.

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Definitions:

Conditioned Stimulus

A stimulus that elicits a response only after learning has taken place, typically through association with an unconditioned stimulus.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without any need for prior learning or conditioning.

Unconditioned Response

An involuntary, inherent reaction to a stimulus, occurring without any learned or conditioned prior history.

Unconditioned Response

An automatic and natural reaction to a stimulus that does not require learning.