Which of the Following Statements Is CORRECT

question 19

Multiple Choice

Which of the following statements is CORRECT?

• A) If a project has "normal" cash flows, then its MIRR must be positive.
• B) If a project has "normal" cash flows, then it will have exactly two real IRRs.
• C) The definition of "normal" cash flows is that the cash flow stream has one or more negative cash flows followed by a stream of positive cash flows and then one negative cash flow at the end of the project's life.
• D) If a project has "normal" cash flows, then it can have only one real IRR, whereas a project with "nonnormal" cash flows might have more than one real IRR.
• E) If a project has "normal" cash flows, then its IRR must be positive.

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Definitions:

Vertical Acquisition

The purchase of a company that operates within the same industry but at a different level of the supply chain.

Horizontal Acquisition

The process of a company acquiring another company in the same industry to increase its market share.

Hostile Takeover

An acquisition attempt by a company or individual against the wishes of the target company's management and board of directors.

Amalgamation

The merger or consolidation of two or more companies into a new entity, combining their assets, liabilities, and operations.