Which One of the Following Statements Is Correct

question 82

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 toward 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 applicable only if a project has conventional cash flows.

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Definitions:

Operations

Refers to the daily activities and processes involved in running a business or manufacturing goods.

Bank Account

A financial arrangement with a banking institution that allows for the deposit and withdrawal of money.

Risk Assessment

The process of identifying, analyzing, and responding to risk factors throughout the life of a project or business operation, aiming to minimize losses.

Internal Control

Systems and procedures implemented by a company to ensure integrity in financial reporting, compliance with laws and regulations, and effectiveness in operations.