Which of the Following Statements Is True About Capital Budgeting

Multiple Choice

Which of the following statements is true about capital budgeting analysis?

A) A project should be purchased if its net present value (NPV) is positive.
B) A project with only cash outflows and no cash inflows would have two internal rates of return (IRRs) .
C) The traditional payback period method should be used for capital budgeting decisions when there is a conflict in the project rankings using the NPV method and the internal rate of return (IRR) method.
D) The net present value (NPV) method should be used to evaluate independent projects, but the internal rate of return (IRR) method should be used to evaluate mutually exclusive projects.
E) The payback period method should be used to evaluate capital budgeting projects that have multiple cash outflows.