Which of the Following Statements Is CORRECT

question 81

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.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows, reflecting the risk and time value of money.

Pension Expense

The cost recognized by an employer for maintaining a pension plan for its employees during a reporting period.

Pension Obligations

These are liabilities companies face for the pension benefits they have promised to pay their employees in the future.

Tax Law

Legislation and regulations governing how taxes are assessed, collected, and managed by governmental authorities.