Which of the Following Statements Is CORRECT

question 1

Multiple Choice

Which of the following statements is CORRECT?

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

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Definitions:

Corporate Social Media

Platforms and strategies used by companies to engage with their audience, promote their brand, and communicate corporate messages.

Clarify Information

The process of making information more understandable and clear by providing additional details or explanation.

Complaint Department

A specialized unit within an organization responsible for handling customer complaints and resolving issues related to products or services.

Word-of-Mouth

Informal communication among people about their experiences with products or services.