Which of the Following Statements Is Trueregarding Capital Budgeting Methods

question 179

Multiple Choice

Which of the following statements is trueregarding capital budgeting methods?

• A)The Fisher rate can never exceed a company's cost of capital.
• B)The internal rate of return measure used for capital project evaluation has more conservative assumptions than the net present value method,especially for projects that generate a positive net present value.
• C)The net present value method of project evaluation will always provide the same ranking of projects as the profitability index method.
• D)The net present value method assumes that all cash inflows can be reinvested at the project's cost of capital.

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