Which of the Following Statements Is CORRECT

question 1

Multiple Choice

Which of the following statements is CORRECT?

• A) An example of an externality is a situation where a bank opens a new office, and that new office causes deposits in the bank's other offices to decline.
• B) The NPV method automatically deals correctly with externalities, even if the externalities are not specifically identified, but the IRR method does not.This is another reason to favor the NPV.
• C) Both the NPV and IRR methods deal correctly with externalities, even if the externalities are not specifically identified.However, the payback method does not.
• D) Identifying an externality can never lead to an increase in the calculated NPV.
• E) An externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations.If the project would have a favorable effect on other operations, then this is not an externality.

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Definitions:

Uplifts

Positive experiences or small victories that improve one’s mood or emotional state, often countering the impact of stress.

Emotional Expressions

Manifestations of feelings that may involve gestures, facial expressions, and vocal tone, serving communicative functions in social interactions.

Love

A profound, complex feeling of affection and attachment towards others, often characterized by emotional, physical, and social components.

Anger

A strong feeling of displeasure and belligerence aroused by a perceived wrong or injustice.