Which of the Following Statements Is CORRECT

question 53

Multiple Choice

Which of the following statements is CORRECT?

• A) If the cost of capital declines, this lowers a project's NPV.
• B) The NPV method is regarded by most academics as being the best indicator of a project's profitability; hence, most academics recommend that firms use only this one method.
• C) A project's NPV depends on the total amount of cash flows the project produces, but because the cash flows are discounted at the cost of capital, it does not matter if the cash flows occur early or late in the project's life.
• D) The NPV and IRR methods may give different recommendations regarding which of two mutually exclusive projects should be accepted, but they always give the same recommendation regarding the acceptability of a normal, independent project.
• E) The NPV method was once the favorite of academics and business executives, but today most authorities regard the MIRR as being the best indicator of a project's profitability.

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Definitions:

Rheumatoid Arthritis

A chronic inflammatory disorder affecting many joints, including those in the hands and feet, characterized by joint pain, swelling, and stiffness.

Sprain

is an injury involving the stretching or tearing of ligaments within a joint, typically caused by sudden twists or overextension.

Pectoral Girdle

The set of bones in the shoulder region that connects the upper limb to the axial skeleton, providing support and facilitating movement.

Clavicle

A bone located in the shoulder region, known as the collarbone, which serves as a strut between the shoulder blade and the sternum.