Which of the Following Statements Is CORRECT

question 52

Multiple Choice

Which of the following statements is CORRECT?

• A) One advantage of the NPV over the IRR is that NPV assumes that cash flows will be reinvested at the cost of capital, whereas IRR assumes that cash flows are reinvested at the IRR.The NPV assumption is generally more appropriate.
• B) One advantage of the NPV over the MIRR method is that NPV takes account of cash flows over a project's full life whereas MIRR does not.
• C) One advantage of the NPV over the MIRR method is that NPV discounts cash flows whereas the MIRR is based on undiscounted cash flows.
• D) Since cash flows under the IRR and MIRR are both discounted at the same rate (the cost of capital), these two methods always rank mutually exclusive projects in the same order.
• E) One advantage of the NPV over the IRR is that NPV takes account of cash flows over a project's full life whereas IRR does not.

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Definitions:

Nerve impulses

Bioelectric signals that transmit information along nerve fibers, facilitating communication within the nervous system.

Calcium

A mineral essential for life, important in bone health, muscle function, and nervous system signalling.

Dura mater

The tough outermost layer of the three membranes covering the brain and spinal cord, providing protection and support.

Meninges

The three membranes (the dura mater, arachnoid, and pia mater) that envelop the brain and spinal cord, providing protection.