The Relationship Between NPV and IRR Is Such That ____

question 81

Multiple Choice

The relationship between NPV and IRR is such that ____.

• A) both approaches always provide the same ranking of alternative investment projects
• B) the IRR of a project is equal to the firm's cost of capital if the NPV of a project is $0
• C) if the NPV of a project is negative, the IRR must be greater than the cost of capital
• D) None of these are correct

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Definitions:

Cephalization

Having a well-recognized anterior head with a brain and sensory receptors.

Nematocysts

Specialized cells in the tentacles of cnidarians (such as jellyfish) that discharge a barbed or venomous coiled thread in response to touch.

Cnidarians

A phylum of aquatic invertebrate animals that includes jellyfish, corals, and sea anemones, characterized by their cnidocytes.

Filter Feeders

Organisms that feed by straining suspended matter and food particles from water, usually by passing the water over a specialized filtering structure.