Which of the following statements is CORRECT? Assume that the project being considered has normal cash...

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Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflo

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Answer 1

Answer #1

The correct statement is

d.To find IRR, we must solve for the discount rate that causes PV of inflows equal to PV of outflows

IRR is the rate at which NPV is equal to zero. It is not calculated from WACC.

NPV will be greater than 1 if IRR is higher than WACC

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Answer 2

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