Which of the Following Statements Is CORRECT

question 61

Multiple Choice

Which of the following statements is CORRECT?

• A) An example of an externality is a situation where a bank opens a new office, and that new office causes deposits in the bank's other offices to increase.
• B) The NPV method automatically deals correctly with externalities, even if the externalities are not specifically identified, but the IRR method does not.This is another reason to favor the NPV.
• C) Both the NPV and IRR methods deal correctly with externalities, even if the externalities are not specifically identified.However, the payback method does not.
• D) Identifying an externality can never lead to an increase in the calculated NPV.
• E) An externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations.If the project would have a favorable effect on other operations, then this is not an externality.

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Definitions:

Lullabies

Gentle songs sung to soothe children or babies to sleep.

Sensation

The process of sensing our environment through touch, taste, sight, sound, and smell, which information is then sent to our brains.

Attachment Parenting

A parenting philosophy that proposes methods aiming to promote the attachment of parent and infant not only by maximal parental empathy and responsiveness but also by continuous bodily closeness and touch.

Co-sleeping

The practice of parents and infants or young children sleeping in close proximity, either in the same bed or in the same room, to facilitate bonding and caregiving.