Which of the Following Statements Is CORRECT

question 24

Multiple Choice

Which of the following statements is CORRECT?

• A) The NPV method assumes that cash flows will be reinvested at the risk-free rate, while the IRR method assumes reinvestment at the IRR.
• B) The NPV method assumes that cash flows will be reinvested at the WACC, while the IRR method assumes reinvestment at the risk-free rate.
• C) The NPV method does not consider all relevant cash flows, particularly cash flows beyond the payback period.
• D) The IRR method does not consider all relevant cash flows, particularly cash flows beyond the payback period.
• E) The NPV method assumes that cash flows will be reinvested at the WACC, while the IRR method assumes reinvestment at the IRR.

---

Definitions:

Cultural Values

represent the collectively held beliefs and norms that guide behavior and preferences within a society or group.

Society's Morals

The prevailing beliefs, principles, and norms about what is right or wrong that guide behavior within a society.

Established Practices

Procedures or methods that are widely accepted and used because of their proven effectiveness over time.

Management Positions

Job roles that involve overseeing and guiding employees or departments to achieve the organization's goals and objectives.