Which of the Following Is a Correct Statement

question 259

Multiple Choice

Which of the following is a correct statement?

• A) The IRR is considered to be the most important project analysis technique.
• B) The AAR is considered preferable to the PI.
• C) Discounted payback analysis requires use of a discount rate.
• D) It is reasonable to use IRR to analyze mutually exclusive investments.
• E) Regular payback analysis is preferable to discounted payback analysis.

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Definitions:

Yield

Yield is the income returned on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost.

Price

The financial sum anticipated, obliged, or handed over in exchange for an item.

Coupon Rate

The interest rate that a bond issuer will pay to the bondholders; it's set as a fixed percentage of the bond's par value.

Yield

The income return on an investment, such as the interest or dividends received from holding a particular security.