Which of the Following Statements Is CORRECT

question 1

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 decline.
• 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:

Spinalis Thoracis

A part of the erector spinae muscle group located along the thoracic spine, assisting in extending the vertebral column.

Spinalis Cervicis

A neck muscle that is part of the spinalis muscle group, responsible for extending and stabilizing the cervical spine.

External Anal Sphincter

A muscle that surrounds the anus, controlling the expulsion of feces from the body.

Levator Ani Iliococcygeus

A component of the levator ani muscle, which supports the pelvic organs and helps in maintaining fecal continence.