Which of the Following Statements Is CORRECT

question 56

Multiple Choice

Which of the following statements is CORRECT?

• A) The NPV method was once the favorite of academics and business executives,but today most authorities regard the MIRR as being the best indicator of a project's profitability.
• B) If the cost of capital declines,this lowers a project's NPV.
• C) The NPV method is regarded by most academics as being the best indicator of a project's profitability,hence most academics recommend that firms use only this one method and disregard other methods.
• D) A project's NPV depends on the total amount of cash flows the project produces,but because the cash flows are discounted at the WACC,it does not matter if the cash flows occur early or late in the project's life.
• E) The NPV and IRR methods may give different recommendations regarding which of two mutually exclusive projects should be accepted,but they always give the same recommendation regarding the acceptability of a normal,independent project.

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Definitions:

Cooperativeness

is the willingness to work together towards common goals, characterized by mutual support and collaboration among individuals or groups.

Modes

Modes refer to various methods, manners, or conditions in which something can exist or occur, often used in different contexts such as transportation, learning, and operations.

Assertiveness

The characteristic of possessing confidence and self-assurance without showing aggressiveness.

Cooperativeness

Willingness to work together towards a common goal or to assist one another.