Which of the following statements is CORRECT? NPV and IRR methods always give the same recommendations regarding which of two mutually exclusive projects should be accepted. The NPV and IRR always give the same recommendation regarding the acceptability of a normal cashflows, independent project. If the cost of capital declines, this lowers a project's NPV. IRR is the discount rate that makes the present value of all the future cash flows of a project larger than its initial cost. The discounted payback period method does not account for the time value of money.
Which of the following statements is CORRECT? NPV and IRR methods always give the same recommendations regarding which of two mutually exclusive projects should be accepted. The NPV and IRR always give the same recommendation regarding the acceptability of a normal cashflows, independent project. If the cost of capital declines, this lowers a project's NPV. IRR is the discount rate that makes the present value of all the future cash flows of a project larger than its initial cost. The discounted payback period method does not account for the time value of money.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Which of the following statements is CORRECT?
NPV and IRR methods always give the same recommendations regarding which
of two mutually exclusive projects should be accepted.
The NPV and IRR always give the same recommendation regarding the
acceptability of a normal cashflows, independent project.
If the cost of capital declines, this lowers a project's NPV.
IRR is the discount rate that makes the present value of all the future cash flows
of a project larger than its initial cost.
The discounted payback period method does not account for the time value of
money.
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