Question
Which of the following statements is correct? A. If the Federal Reserve Board lowered interest rates, this would, other things being held constant, tend to
Which of the following statements is correct?
A. If the Federal Reserve Board lowered interest rates, this would, other things being held constant, tend to favor short-term as opposed to long-term projects.
B. For NPV versus IRR ranking conflicts to occur, the projects under consideration must have NPV profiles which cross one another. Crossing profiles can occur only if the two projects differ in the size of the required investment outlay.
C. Large costs occur at the end of nuclear power plants' lives because these plants have to be close down, and shutdown costs are high due to the difficulty of handling radioactive materials. For this reason, it is possible that a nuclear plant project could have two IRR's.
D. All of the the above statements are false.
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