Which of the Following Statements Is CORRECT

question 21

Multiple Choice

Which of the following statements is CORRECT?

• A) One defect of the IRR method is that it does not take account of the time value of money.
• B) One defect of the IRR method is that it does not take account of the cost of capital.
• C) One defect of the IRR method is that it values a dollar received today the same as a dollar that will not be received until sometime in the future.
• D) One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid.
• E) One defect of the IRR method is that it does not take account of cash flows over a project's full life.

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Definitions:

Felsic Pyroclastic

Materials produced by explosive volcanic eruptions that are rich in silica and comprise various types of volcanic ash, pumice, and other particles.

Volcanic Layer

A stratum or deposit on the Earth's surface resulting from volcanic activity, consisting of lava, ash, and other volcanic materials.

Last Eruption

The most recent volcanic event during which magma is expelled onto the Earth's surface or into its atmosphere, often recorded in historical or geological records.

Island Arc

An island arc is a curved chain of volcanic islands located at a tectonic plate margin, typically formed above a subducting plate where magma rises to the surface, creating new crust.