Which of the Following Statements Is CORRECT

question 56

Multiple Choice

Which of the following statements is CORRECT?

• A) The NPV method was once the favorite of academics and business executives,but today most authorities regard the MIRR as being the best indicator of a project's profitability.
• B) If the cost of capital declines,this lowers a project's NPV.
• C) The NPV method is regarded by most academics as being the best indicator of a project's profitability,hence most academics recommend that firms use only this one method and disregard other methods.
• D) A project's NPV depends on the total amount of cash flows the project produces,but because the cash flows are discounted at the WACC,it does not matter if the cash flows occur early or late in the project's life.
• E) The NPV and IRR methods may give different recommendations regarding which of two mutually exclusive projects should be accepted,but they always give the same recommendation regarding the acceptability of a normal,independent project.

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Definitions:

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brainstem to the lower back, carrying nerve impulses to and from the brain.

Brain

The brain is the central organ of the human nervous system, located in the head, responsible for processing sensory information, controlling movement, and facilitating cognitive functions.

Synaptic Cleft

Small gap between presynaptic and postsynaptic cells of a synapse.

Presynaptic Membrane

The membrane of a nerve terminal that faces the receiving (postsynaptic) cell and is where neurotransmitters are released.