Which of the Following Statements Is CORRECT

question 52

Multiple Choice

Which of the following statements is CORRECT?

• A) One advantage of the NPV over the IRR is that NPV assumes that cash flows will be reinvested at the cost of capital, whereas IRR assumes that cash flows are reinvested at the IRR.The NPV assumption is generally more appropriate.
• B) One advantage of the NPV over the MIRR method is that NPV takes account of cash flows over a project's full life whereas MIRR does not.
• C) One advantage of the NPV over the MIRR method is that NPV discounts cash flows whereas the MIRR is based on undiscounted cash flows.
• D) Since cash flows under the IRR and MIRR are both discounted at the same rate (the cost of capital), these two methods always rank mutually exclusive projects in the same order.
• E) One advantage of the NPV over the IRR is that NPV takes account of cash flows over a project's full life whereas IRR does not.

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Definitions:

Harry Levinson's Approach

A psychological perspective focusing on the complex relationship between organizational structures, management practices, and employee psychological needs.

Interpretive Data

Information analyzed in a subjective manner to understand its meaning or implications in specific contexts.

Organizational Diagnosis

The process of assessing the current health or condition of an organization to identify areas for improvement.

Force Field Analysis

A method used for decision-making that analyzes forces for and against a change to identify the most viable course of action.