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:

Significance Level

The significance level, often denoted by alpha (α), is the probability of rejecting the null hypothesis when it is true, used as a threshold for determining statistical significance.

Chi-Square Goodness-of-Fit Test

A statistical test used to determine whether a set of observed frequencies differ from a set of expected frequencies.

Expected Frequencies

The theoretically predicted counts of occurrences across different categories in a contingency table, used in chi-squared tests.

Chi-Square Distribution

A statistical distribution used to assess the goodness-of-fit between observed and expected frequencies.