Assume a frictionless financial market. Do you agree with the following statements?

Select one of the following: Yes (Y), No (N), or Uncertain (U).

Part (A)

The NPV rule is short-sighted as it focuses only on the current market value.

Part (B)

A firm should use market prices of similar assets traded in the market to compute the present value a project only if it agrees with these prices.

Part (C)

The NPV rule is applicable only when the firms shareholders hold well-diversified portfolios for their investments.

Part (D)

The NPV rule requires the firm to have a diverse ownership structure.

Part (E)

One cannot rely on market prices to make a real investment decision since they are too volatile.