Which of the Following Statements Is Most Correct

question 72

Multiple Choice

Which of the following statements is most correct?

• A) If a project's internal rate of return (IRR) exceeds the required return, then the project's net present value (NPV) must be negative.
• B) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
• C) The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return equal to the IRR.
• D) A project with a NPV = 0 is not acceptable.

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Definitions:

External Environment

All factors outside an organization that can potentially affect its performance and operations.

Volatile

Characterized by rapid, unexpected changes or instability, often associated with financial markets, chemicals, or situations.

Strategic Formulation

The process of identifying and setting appropriate strategies for an organization to secure a competitive position and achieve long-term goals.

Top Executives

Top executives are the highest-ranking officers in an organization, responsible for overall management and making major corporate decisions.