Which of the Following Statements Is CORRECT

question 59

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:

Cortex

The outermost layer of the brain, involved in numerous high-level functions, including thought, memory, and sensory processing.

Two-Factor Theory

A psychological theory suggesting emotions are based on physiological arousal and cognitive labeling.

Cognitive Appraisal

The process of evaluating a situation in terms of its relevance to one's well-being and determining the appropriate reaction.

Physiological Arousal

Refers to the physical responses of the body, such as increased heart rate and sweating, that accompany emotions and cognitive states.