If a Firm Discovers a Ranking Conflict Exists After Evaluating

question 58

Multiple Choice

If a firm discovers a ranking conflict exists after evaluating two mutually exclusive capital budgeting projects using the net present value (NPV) technique and the internal rate of return (IRR) technique, which of the following capital budgeting techniques should it use to ensure the correct value-maximizing decision is made?

• A)Traditional payback period (PB)
• B)Net present value (NPV)
• C)Internal rate of return (IRR)
• D)Discounted payback period (DPB)
• E)It doesn't matter which capital budgeting technique is used because they all produce correct value-maximizing decisions.

---

Definitions:

Anorexia Nervosa

A serious eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to self-imposed starvation and excessive weight loss.

Hypothalamus

Component of the brain that regulates eating, drinking, sex, and basic emotions; abnormal behaviors involving any of these activities may be the result of dysfunction in the hypothalamus.

Body Mass Index (BMI)

A measurement of body fat based on height and weight that applies to adult men and women.

DSM-5

The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders serves as a comprehensive manual for healthcare practitioners to identify and classify mental health disorders.