Which of the Following Statements Is CORRECT

question 27

Multiple Choice

Which of the following statements is CORRECT?

• A) The NPV,IRR,MIRR,and discounted payback (using a payback requirement of 3 years or less)methods always lead to the same accept/reject decisions for independent projects.
• B) For mutually exclusive projects with normal cash flows,the NPV and MIRR methods can never conflict,but their results could conflict with the discounted payback and the regular IRR methods.
• C) Multiple IRRs can exist,but not multiple MIRRs.This is one reason some people favor the MIRR over the regular IRR.
• D) If a firm uses the discounted payback method with a required payback of 4 years,then it will accept more projects than if it used a regular payback of 4 years.
• E) The percentage difference between the MIRR and the IRR is equal to the project's WACC.

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Definitions:

Empiricism

The philosophy that knowledge comes primarily from sensory experience, emphasizing the role of observation and experimentation in science.

Theory

A systematic set of principles or explanation for understanding, predicting, or controlling some aspect of the natural or social world.

Psychometrics

The scientific study of the measurement of human abilities, attitudes, and traits through the development and application of psychological tests.

Psychotherapy

A form of therapy aimed at addressing mental health issues by talking with a psychologist, psychiatrist, or another mental health provider.