Which of the Following Statements Is CORRECT

question 109

Multiple Choice

Which of the following statements is CORRECT?

• A)If you have a series of cash flows, each of which is positive, you can solve for I, where the solution value of I causes the PV of the cash flows to equal the cash flow at Time 0.
• B)If you have a series of cash flows, and CF₀ is negative but each of the following CFs is positive, you can solve for I, but only if the sum of the undiscounted cash flows exceeds the cost.
• C)To solve for I, one must identify the value of I that causes the PV of the positive CFs to equal the absolute value of the PV of the negative CFs. This is, essentially, a trial-and-error procedure that is easy with a computer or financial calculator but quite difficult otherwise.
• D)If you solve for I and get a negative number, then you must have made a mistake.
• E)If CF₀ is positive and all the other CFs are negative, then you cannot solve for I.

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Definitions:

Oldest Unit

This term refers to the earliest or most ancient geological formation or stratum in a given sequence.

Canyon Feature

A deep gorge, usually with a river flowing through it, formed by long-term erosion from water activity.

Lava Flow

The movement of molten rock that emerges from a volcano or fissure onto the Earth's surface, where it solidifies as it cools.

Dike Unit

It is a geological structure consisting of a major vertical or steeply-dipping sheet-like body of intruded igneous rock that cuts through older rocks.