Which of the Following Statements Is CORRECT

question 51

Multiple Choice

Which of the following statements is CORRECT?

• A) projects with "normal" cash flows can have two or more real irrs.
• B) projects with "normal" cash flows must have two changes in the sign of the cash flows, e.g., from negative to positive to negative. if there are more than two sign changes, then the cash flow stream is "nonnormal."
• C) the "multiple irr problem" can arise if a project's cash flows are "normal."
• D) projects with "nonnormal" cash flows are almost never encountered in the real world.
• E) projects with "normal" cash flows can have only one real irr.

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Definitions:

Output

The amount of goods or services produced by a company, country, or economic system within a certain period.

Inflation Tax

An implicit tax that results from the erosion of purchasing power due to inflation, effectively reducing the real value of money held by the public.

U.S. Government Revenue

The total income received by the government from taxes and non-tax sources like tariffs, fees, and government-owned enterprises income.

Quantity Theory

An economic theory that links the quantity of money in an economy to the level of prices of goods and services.