Which of the Following Statements Is CORRECT

question 25

Multiple Choice

Which of the following statements is CORRECT?

• A) An externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations.If the project would have a favorable effect on other operations,then this is not an externality.
• B) An example of an externality is a situation where a bank opens a new office,and that new office causes deposits in the bank's other offices to decline.
• C) The NPV method automatically deals correctly with externalities,even if the externalities are not specifically identified,but the IRR method does not.This is another reason to favor the NPV.
• D) Both the NPV and IRR methods deal correctly with externalities,even if the externalities are not specifically identified.However,the payback method does not.
• E) Identifying an externality can never lead to an increase in the calculated NPV.

---

Definitions:

Elderly People

Individuals who are significantly advanced in age, often defined as being 65 years of age or older.

Initially Diagnosed

The first identification of a medical or psychological condition, based on an assessment of symptoms and possibly diagnostic tests.

Psychotic Cognitive Symptoms

Symptoms associated with psychotic disorders, such as schizophrenia, that include difficulties in memory, attention, and executive functions, contributing to a distorted perception of reality.

Delirium

An acute mental state characterized by confusion, disturbed concentration, and cognitive dysfunction, often resulting from physical or mental illness.