Which of the Following Statements Is CORRECT

question 58

Multiple Choice

Which of the following statements is CORRECT?

• A) The NPV method assumes that cash flows will be reinvested at the WACC,while the IRR method assumes reinvestment at the IRR.
• B) The NPV method assumes that cash flows will be reinvested at the risk-free rate,while the IRR method assumes reinvestment at the IRR.
• C) The NPV method assumes that cash flows will be reinvested at the WACC,while the IRR method assumes reinvestment at the risk-free rate.
• D) The NPV method does not consider all relevant cash flows,particularly cash flows beyond the payback period.
• E) The IRR method does not consider all relevant cash flows,particularly cash flows beyond the payback period.

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Definitions:

Hippocampus

A brain structure that is a central processor of memory, especially memory for locations.

Ovaries/Testes

The primary reproductive organs in females and males, respectively, responsible for producing gametes (eggs in females, sperm in males) and hormone production.

Prefrontal Cortex

A region of the brain located in the frontal lobes, involved in complex cognitive behaviors, decision-making, and moderating social behavior.

Limbic System

A complex system of nerves and networks in the brain, involved in basic emotions and drives such as fear, pleasure, and anger.