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:

Taxes

Mandatory monetary fees or different forms of charges levied on an individual or entity by a government body to finance government operations and several public services.

Interest Paid

Interest paid refers to the amount of money paid over a period for the use of borrowed funds, representing the cost of borrowing to the debtor.

Net Working Capital

The variance between a business's current holdings and outstanding debts, signifying the entity's short-term economic condition and operational competence.

CCA Rate

The Capital Cost Allowance rate, which determines the percentage of an asset's cost that can be claimed as depreciation for tax purposes in Canada.