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1 pts Question 31 Which of the following statements is incorrect? The ARR is based on accounting numbers and ignores the time value of money.

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1 pts Question 31 Which of the following statements is incorrect? The ARR is based on accounting numbers and ignores the time value of money. The NPV method assumes that cash flows from a project are reinvested at the cost of capital, whereas the IRR technique assumes they are reinvested at the IRR. Unconventional cash flows can cause a conflict between the NPV and IRR decision rules. Most of the answers are correct except one. A positive NPV project decreases the value of the firm and stockholders' wealth Question 32 1 pts Which of the following statements is correct? Projects are classified as independent when their cash flows are related. If the NPV is positive, the project should be accepted because all projects with a positive NPV will increase the value of the firm. When evaluating two projects that require different outlays, the IRR always recognize the difference in the size of the investments. All the answers are correct. The greatest shortcoming of the payback method is its failure to consider cash flows before the payback period

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