Which One of the Following Statements Would Generally Be Considered

question 66

Multiple Choice

 Which one of the following statements would generally be considered as accurate given independent projects with conventional cash flows?

• A) The internal rate of return decision may contradict the net present value decision. 
• B) Business practice dictates that independent projects should have three distinct accept indicators before a project is actually implemented. 
• C) The payback decision rule could override the net present value decision rule should cash availability be limited. 
• D) The profitability index rule cannot be applied in this situation. 
• E) The projects cannot be accepted unless the average accounting return decision ruling is positive. 

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Definitions:

Real Rate of Return

The rate of return on an investment after adjusting for inflation, representing the actual purchasing power of the investment's earnings.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values diverge from the mean.

Correlation

A statistical measure that describes the extent to which two variables change together, indicating a relationship but not causality.

Dividend Yield

A financial ratio indicating how much a company pays out in dividends each year relative to its stock price.