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:

Bondholder

An individual or entity that holds the debt security issued by companies or governments, entitling them to receive the bond's face value plus interest.

Shareholder

An individual or organization that owns one or more shares of stock in a public or private corporation, thus holding a portion of the company's ownership.

Corporate Charter

A corporate charter, also known as articles of incorporation, is a legal document that establishes a corporation, outlining its structure, objectives, and the rules governing its operation.

Authorized

This term indicates that permission has been given by a relevant authority or person allowing specific actions or activities.