Which of the following statements is most CORRECT?

Select one:

a.The NPV method give the same weight to cashflows received in different years.

b.The NPV method assumes that cash flows will be reinvested at the cost of capital while the IRR method assumes reinvestment at the risk-free rate.

c.The IRR method considers all relevant cash flows including cash flows beyond the payback period.

d.The NPV method assumes that cash flows will be reinvested at the risk-free rate while the IRR method assumes reinvestment at the IRR.

e.Both the IRR and MIRR methods assume that cash flows will be reinvested at the cost of capital.

Which of the following statements is incorrect?

Select one:

a.Both the NPV and the IRR methods provide an estimate of the maximum cost of capital that a company can afford.

b.Other things equal, the discounted payback method takes a longer time to breakeven than the regular payback method.

c.Both the regular payback and discounted payback methods tell us when we recover our investment.

d.Neither the discounted payback method nor the regular payback method takes into account the cashflows beyond the payback year.

e.Unlike the regular payback method, the discounted payback method takes into account the time value of money.