Which of the Following Statements Is CORRECT

question 127

Multiple Choice

Which of the following statements is CORRECT?

• A) If CF₀ is positive and all the other CFs are negative, then you cannot solve for I.
• B) If you have a series of cash flows, each of which is positive, you can solve for I, where the solution value of I causes the PV of the cash flows to equal the cash flow at Time 0.
• C) If you have a series of cash flows, and CF₀ is negative but each of the following CFs is positive, you can solve for I, but only if the sum of the undiscounted cash flows exceeds the cost.
• D) To solve for I, one must identify the value of I that causes the PV of the positive CFs to equal the absolute value of the PV of the negative CFs.This is, essentially, a trial-and-error procedure that is easy with a computer or financial calculator but quite difficult otherwise.
• E) If you solve for I and get a negative number, then you must have made a mistake.

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Definitions:

Attrition

The gradual reduction in workforce numbers due to employees leaving naturally through resignation, retirement, or death, without intending to directly replace them.

Early Retirement

The act of leaving one's job or career before the traditional retirement age, often incentivized by employers or chosen for personal or health reasons.

Layoffs

The act of terminating employees, often due to economic downturns, organizational restructuring, or cost-cutting measures.

Legal Rights

Entitlements granted to individuals or entities under the law, ensuring protection, fairness, and equality.