ZuoTi.Pro
Question

Question 30 (1 point) Which of the following statements is CORRECT? Assume that the project being considered has normal cash
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Statement 4 is correct

IRR is discount rate at which present value of cash flows is equal to pv of outflows

If IRR is more than wacc then Npv will be positive and vice-versa

If irr is positive Npv cannot be positive

0 0
Add a comment
Know the answer?
Add Answer to:
Question 30 (1 point) Which of the following statements is CORRECT? Assume that the project being...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

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

    Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. Group of answer choices A) If a project's IRR is positive, then its NPV must also be positive. B) A project's IRR is the discount rate that causes the PV of the inflows to equal the project's cost. C) If a project's IRR is smaller than the WACC, then its NPV will be positive....

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

    Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. a. A project's regular IRR is found by compounding the cash inflows at the WACC to find the terminal value (TV), then discounting this TV at the WACC. b. A project's regular IRR is found by discounting the cash inflows at the WACC to find the present value (PV), then compounding this PV to...

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

    Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. a. A project's regular IRR is found by compounding the cash inflows at the cost of capital to find the terminal value (TV), then discounting this TV at the cost of capital. b. To find a project's IRR, we must find a discount rate that is equal to the cost of capital. c. If...

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

    Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one cash outflow at t = o followed by a series of positive cash flows. 10 a. If a project's IRR is greater than its WACC, then its MIRR will be greater than the IRR. b. To find a project's MIRR, we compound cash inflows at the regular IRR and then find the discount rate that causes the PV of the terminal...

  • You MUST explain your answer in order to receive participation credit. Why are some of the...

    You MUST explain your answer in order to receive participation credit. Why are some of the other options FALSE? >>>> Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows,with one outflow followed by a series of inflows. a. A project’s NPV is found by compounding the cash inflows at the IRR to find the terminal value (TV), then discounting the TV at the WACC. b. The lower the WACC used to calculate...

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

    Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. a. The longer a project's payback period, the more desirable the project is normally considered to be by this criterion. b. One drawback of the payback criterion for evaluating projects is that this method does not properly account for the time value of money. c. If a project's payback is positive, then the project...

  • Which of the following statements is CORRECT? To find the MIRR, we first compound cash flows...

    Which of the following statements is CORRECT? To find the MIRR, we first compound cash flows at the regular IRR to find the TV, and then we discount the TV at the WACC to find the PV. The NPV and IRR methods both assume that cash flows can be reinvested at the WACC. However, the MIRR method assumes reinvestment at the MIRR itself. If two projects have the same cost, and if their NPV profiles cross in the upper right...

  • 8. Which of the following statementele mele wing statements is correct for a project with a...

    8. Which of the following statementele mele wing statements is correct for a project with a positive NPV? A) IRR exceeds the cost of capital B) Accepting the project has an indeterminate effect on shareholders C) The discount rate exceeds the cost of capital. D) The profitability index equals one. 9. If the net present value of a project which costs $20,000 is $5,000 when the discount rate is 10%, then the: A) project's IRR equals 10%. B) project's rate...

  • You are a financial analyst for the Brittle Company. The director of capital budgeting has asked...

    You are a financial analyst for the Brittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments: Projects X and Y. Each project has a cost of $10,000, and the cost of capital for each is 12%. The projects' expected net cash flows are shown in the table below. Expected Net Cash Flows Year Project X Project Y 0 – $10,000 – $10,000 1 6,500 3,500 2 3,000 3,500 3 3,000 3,500 4 1,000...

  • Assume a project has conventional cash flows. All else equal, which of the following statements is...

    Assume a project has conventional cash flows. All else equal, which of the following statements is CORRECT? a. The project's MIRR is unaffected by changes in the WACC. b. The project's NPV increases as the WACC declines. c. The project's IRR increases as the WACC declines. d. The project's discounted payback increases as the WACC declines. e. The project's regular payback increases as the WACC declines.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT