Which of the Following Statements Is Correct

question 58

Multiple Choice

Which of the following statements is correct?

• A)There can never be a conflict between NPV and IRR decisions if the decision is related to a normal, independent project, i.e., NPV will never indicate acceptance if IRR indicates rejection.
• B)To find the MIRR, we first compound CFs at the regular IRR to find the TV, and then we discount the TV at the required rate of return to find the PV.
• C)The NPV and IRR methods both assume that cash flows are reinvested at the required rate of return. However, the MIRR method assumes reinvestment at the MIRR itself.
• D)If you are choosing between two projects which have the same cost, and if their NPV profiles cross, then the project with the higher IRR probably has more of its cash flows coming in the later years.
• E)A change in the required rate of return would normally change both a project's NPV and its IRR.

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Definitions:

Arteries

Blood vessels that carry oxygenated blood away from the heart to the body's tissues, except for the pulmonary arteries which carry deoxygenated blood to the lungs.

Deoxygenated Blood

Blood that is rich in carbon dioxide and low in oxygen, typically found in the venous system and right chambers of the heart.

Right Atrium

The upper right chamber of the heart that receives deoxygenated blood from the body and pumps it into the right ventricle.

Vena Cava

A large vein carrying deoxygenated blood into the heart, with two principales types: the superior and the inferior vena cava.