Which of the Following Statements Is CORRECT

question 85

Multiple Choice

Which of the following statements is CORRECT?

• A) The IRR method appeals to some managers because it gives an estimate of the rate of return on projects rather than a dollar amount,which the NPV method provides.
• B) The discounted payback method eliminates all of the problems associated with the payback method.
• C) When evaluating independent projects,the NPV and IRR methods often yield conflicting results regarding a project's acceptability.
• D) To find the MIRR,we discount the TV at the IRR.
• E) A project's NPV profile must intersect the X-axis at the project's WACC.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in finance and investment analysis.

Interest Rate

The percentage at which interest is charged or paid on borrowed or saved money, often influencing economic activity.

Time Preference

An individual's preference for receiving goods or services sooner rather than later, reflecting the value of future goods as compared to present goods.

Money Rate

Typically refers to the interest rate, which is the cost of borrowing money, or the return on investing money, expressed as a percentage.