Which of the Following Statements Is CORRECT

question 18

Multiple Choice

Which of the following statements is CORRECT?

• A) For mutually exclusive projects with normal cash flows, the NPV and MIRR methods can never conflict, but their results could conflict with the discounted payback and the regular IRR methods.
• B) Multiple IRRs can exist, but not multiple MIRRs.This is one reason some people favor the MIRR over the regular IRR.
• C) If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years.
• D) The percentage difference between the MIRR and the IRR is equal to the project's WACC.
• E) The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less)methods always lead to the same accept/reject decisions for independent projects.

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Definitions:

Warranty Breach

Occurs when a product fails to meet the standards or conditions promised by a warranty, leading to potential legal redress.

Condition Subsequent

A condition in a contract that, when fulfilled, terminates an existing obligation under the contract.

Legal Tender

Currency that by law must be accepted as payment for debts and financial obligations.

Breach Of Warranty

The failure to fulfill the terms of a promise or assertion concerning the quality or nature of a product or service.