Which of the Following Statements Is CORRECT

question 27

Multiple Choice

Which of the following statements is CORRECT?

• A) The NPV,IRR,MIRR,and discounted payback (using a payback requirement of 3 years or less)methods always lead to the same accept/reject decisions for independent projects.
• B) For mutually exclusive projects with normal cash flows,the NPV and MIRR methods can never conflict,but their results could conflict with the discounted payback and the regular IRR methods.
• C) Multiple IRRs can exist,but not multiple MIRRs.This is one reason some people favor the MIRR over the regular IRR.
• D) If a firm uses the discounted payback method with a required payback of 4 years,then it will accept more projects than if it used a regular payback of 4 years.
• E) The percentage difference between the MIRR and the IRR is equal to the project's WACC.

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Definitions:

Operant Conditioning

A learning process through which behaviors are encouraged or discouraged by rewards or punishments.

Humanistic Therapy

A therapeutic approach focusing on an individual's potential and stresses the importance of growth and self-actualization.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus, famously demonstrated by Ivan Pavlov.

Cognitive Therapy

A form of psychotherapy that emphasizes the importance of thought patterns in how we feel and what we do.