Which of the Following Statements Is Correct

question 67

Multiple Choice

Which of the following statements is correct?

• A)When dealing with independent projects, discounted payback (using a payback requirement of 3 or less years), NPV, IRR, and modified IRR always lead to the same accept/reject decisions for a given project.
• B)When dealing with mutually exclusive projects, the NPV and modified IRR methods always rank projects the same, but those rankings can conflict with rankings produced by the discounted payback and the regular IRR methods.
• C)Multiple rates of return are possible with the regular IRR method but not with the modified IRR method, and this fact is one reason given by the textbook for favoring MIRR (or modified IRR) over IRR.
• D)Statements a, b and c are all false.

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Definitions:

Demand

The desire and ability of consumers to purchase goods or services at given prices.

Supply

The total amount of a product or service that is available for purchase at any given price.

Dollar Appreciates

A situation where the value of the U.S. dollar increases compared to other currencies, affecting international trade and economic dynamics.

Interest Rates

The cost of borrowing money or the rate at which interest is paid by a borrower for the use of money.