Which One of the Following Statements Is Correct in Relation

question 70

Multiple Choice

Which one of the following statements is correct in relation to independent projects?

• A)The internal rate of return cannot be used to determine the acceptability of a project that has financing type cash flows.
• B)A project with investing type cash flows is acceptable if its internal rate of return exceeds the required return.
• C)A project with financing type cash flows is acceptable if its internal rate of return exceeds the required return.
• D)The net present value profile is upsloping for projects with both investing and financing type cash flows.
• E)Projects with financing type cash flows are acceptable only when the internal rate of return is negative.

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Definitions:

Tax Treatment

Refers to the method or rules applied in determining how an item or situation is taxed, affecting the financial outcome.

Rental Income

Income received from renting out property, such as houses or apartments, which is subject to tax.

Gross Income

The total income from all sources before any deductions or taxes are applied.

Net Income

The total earnings of a person or company after all expenses and taxes have been subtracted from total revenue.