Financial Management-Capital Budgeting Decisions- Risk Analysis (CBSE-NET (UGC) Management (Paper-II & Paper-III)): Questions 4 - 4 of 4

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Question number: 4

» Financial Management » Capital Budgeting Decisions- Risk Analysis

Appeared in Year: 2015

MCQ▾

Question

Statement-I: In general, the NPV and IRR methods lead to the same acceptance or rejection decision, when a single project is involved.

Statement-II: The inconsistency in ranking of competing projects as per the NPV and IRR methods lies in the implicit assumptions with regard of different rates of returns on re-investment of intermediate cash flows.

Choices

Choice (4) Response

a.

Statement-I is incorrect, statement-II is correct

b.

The statements I and statement II are correct

c.

Statement-I is correct, statement II is incorrect

d.

The statements I and statement II are incorrect

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