Which of the Following Statements Is CORRECT

question 49

Multiple Choice

Which of the following statements is CORRECT?

• A) Projects with "normal" cash flows can have two or more real IRRs.
• B) Projects with "normal" cash flows must have two changes in the sign of the cash flows, e.g., from negative to positive to negative. If there are more than two sign changes, then the cash flow stream is "nonnormal."
• C) The "multiple IRR problem" can arise if a project's cash flows are "normal."
• D) Projects with "nonnormal" cash flows are almost never encountered in the real world.
• E) Projects with "normal" cash flows can have only one real IRR.

---

Definitions:

Clamp-On Ammeter

A type of ammeter that can measure a wire's current without the need to disconnect it from the circuit, by clamping around the wire.

True Power

The actual power consumed by a circuit, measured in watts, as opposed to apparent power, which includes reactive power.

Series RC

A circuit configuration consisting of a resistor (R) and a capacitor (C) connected in a series arrangement.

Apparent Power

The total power in an AC circuit, equal to the product of the voltage and current, measured in volt-amperes (VA).