Which One of the Following Statements Is Correct? Assume Cash

question 98

Multiple Choice

Which one of the following statements is correct? Assume cash flows are conventional.

• A)If the IRR exceeds the required return, the profitability index will be less than 1.0.
• B)The profitability index will be greater than 1.0 when the net present value is negative.
• C)When the internal rate of return is greater than the required return, the net present value is positive.
• D)Projects with conventional cash flows have multiple internal rates of return.
• E)If two projects are mutually exclusive, you should select the project with the shortest payback period.

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