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When we assume in our calculations for capital budgeting decisions that all cash flows occur at the end of individual years during the life of
When we assume in our calculations for capital budgeting decisions that all cash flows occur at the end of individual years during the life of an investment project when, in fact, they flow more or less continuously during those years, which of the following statements is true?
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Inconsistent errors will exist in either net present value NPV or IRR.
The internal rate of return IRR of the project will likely be overstated.
The stated ie calculated net present value NPV of the project will likely be understated.
The use of DCF models will produce erratic results.
The net present value NPV of the project will likely be overstated.
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