Which of the Following Statements Is CORRECT

question 71

Multiple Choice

Which of the following statements is CORRECT?

• A) One defect of the IRR method versus the NPV is that the IRR does not take account of the time value of money.
• B) One defect of the IRR method versus the NPV is that the IRR does not take account of the cost of capital.
• C) One defect of the IRR method versus the NPV is that the IRR values a dollar received today the same as a dollar that will not be received until sometime in the future.
• D) One defect of the IRR method versus the NPV is that the IRR does not take proper account of differences in the sizes of projects.
• E) One defect of the IRR method versus the NPV is that the IRR does not take account of cash flows over a project's full life.

---

Definitions:

Private Placement

The sale of securities directly to a small number of private investors rather than through a public offering, often used by smaller companies to raise capital.

Public

Refers to the general populace or to companies and organizations that are owned by government entities or whose shares are traded publicly.

Venture Capital Groups

Organizations that provide funding to startups or small businesses with high growth potential in exchange for equity.

Seed Capital

Seed Capital is the initial funding used to start a business, often provided by angel investors, friends, family, or the founders themselves, crucial for getting the venture off the ground before it can generate its own cash flow.