Which of the Following Statements Is CORRECT

question 53

Multiple Choice

Which of the following statements is CORRECT?

• A)For a project to have more than one IRR, then both IRRs must be greater than the WACC.
• B)If two projects are mutually exclusive, then they are likely to have multiple IRRs.
• C)If a project is independent, then it cannot have multiple IRRs.
• D)Multiple IRRs can only occur if the signs of the cash flows change more than once.
• E)If a project has two IRRs, then the smaller one is the one that is most relevant, and it should be accepted and relied upon.

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Definitions:

Bankruptcy Code

The set of federal statutes that govern the process of legal declaration of a person or corporation's inability to pay debts.

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Financial support paid by one former spouse to another after divorce or separation, intended to provide for the recipient's needs.

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