Which of the Following Statements Is CORRECT

question 21

Multiple Choice

Which of the following statements is CORRECT?

• A) One defect of the IRR method is that it does not take account of the time value of money.
• B) One defect of the IRR method is that it does not take account of the cost of capital.
• C) One defect of the IRR method is that it values a dollar received today the same as a dollar that will not be received until sometime in the future.
• D) One defect of the IRR method is that it assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid.
• E) One defect of the IRR method is that it does not take account of cash flows over a project's full life.

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Definitions:

Problem-Solving

The process of identifying solutions to specific issues that are typically obstacles to reaching one’s goal.

Idea Generation

The procedure involved in generating, advancing, and distributing innovative ideas or solutions.

Implementation and Diffusion

The process by which new ideas, practices, or technologies are put into use and spread across various sectors or communities.

Innovation Process

The sequence of activities involved in the development and implementation of new ideas, products, or services.