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:

Adjudicated Insane

refers to the legal determination that an individual is mentally incapable of managing their own affairs or standing trial due to mental illness.

Void

A contract or legal agreement that is null and has no legal force or effect.

Appointed Guardian

A person legally designated to manage the personal and/or financial affairs of another individual who is unable to do so.

Intoxicated Persons

Individuals whose normal capacity to act or make decisions is significantly impaired due to the consumption of alcohol or drugs.