Use the Information Below to Answer the Following Question(s)

Use the information below to answer the following question(s) .Wet Water Company drills residential and commercial wells.The company is in the process of analyzing the purchase of a new drill.Information on the proposal is provided below:
Note: Other than the initial investment, cash flows are end of period.The working capital is returned at the end of the investment period.
-The net present value method is better than the internal rate of return because

A) managers generally find the NPV method easier to understand.
B) it always yields the same result as IRR.
C) IRR focuses more on accounting income.
D) it considers the source of cash flows.
E) the NPV's of different projects can be added together, and investments may have multiple required rates of return.

Correct Answer:

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