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:

Zygote

The initial cell formed when a sperm cell fertilizes an egg cell, marking the beginning of a developing organism.

Myometrium

The muscular layer of the uterus that contracts during childbirth to help deliver the baby.

Uterus

A female reproductive organ in which the fertilized egg implants and develops into a fetus.

Endometrium

The mucous membrane lining the interior of the uterus, which thickens during the menstrual cycle in preparation for possible implantation of an embryo.