Which One of the Following Statements Is Correct

question 88

Multiple Choice

Which one of the following statements is correct?

• A) The internal rate of return is the most reliable method of analysis for any type of investment decision.
• B) The payback method is biased towards short-term projects.
• C) The modified internal rate of return is most useful when projects are mutually exclusive.
• D) The average accounting return is the most difficult method of analysis to compute.
• E) The net present value method is only applicable if a project has conventional cash flows.

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Definitions:

Buying Decision

The process through which a consumer decides whether or not to purchase a product or service.

Frito-Lay

A subsidiary of PepsiCo, specializing in the manufacture and distribution of snack foods.

Inventory

The total amount of goods or materials a business holds, intended for sale or use in production, often managed to optimize supply chain efficiency.

Order Taker

An individual or system in charge of receiving and processing customer orders without engaging in proactive selling activities.