Which One of the Following Statements Is True

question 21

Multiple Choice

Which one of the following statements is true?

• A)You must know the discount rate to compute the NPV but not the IRR.
• B)You must have a discount rate to compute,NPV,IRR,PI,and discounted payback.
• C)Payback uses the same discount rate as that applied in the NPV calculation.
• D)Financing projects can only ever have one IRR.
• E)Financing projects are acceptable if the NPV is negative.

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Definitions:

Exclusive Government Contract

A legal agreement where a government grants only one company the right to provide goods or services, prohibiting competitors.

Acquire Patents

Process of obtaining legal rights to inventions or designs, ensuring exclusive use to the holder.

Cost-Reduction

Strategies or actions taken to lower expenses and improve efficiency in production or operations.

Long-Run Profitability

A measure of a company's ability to maintain earnings at a certain level over the length of time necessary to cover all costs, including variable and fixed costs.