Option A : IRR can be used to evaluate the project. Generally, project with higher IRR are generally considered better.
Option B - False. IRR is independent on WACC
Option C - False.Dicounted payback considers time value of money. Not notmal payback.
Which of the following statements about a normal project is correct? You can use the IRR...
Which of the following statements is correct? (a) The NPV profile graph for a normal project will generally have a postive(upward) slope as the life of the project increase. (b) An NPV profile graph is designed to give decision makers an idea about how a project's risk varies with its life (c) An NPV profile graph is designed to give decision makers an idea about how a project's contribution to the firms value varies with the cost of capital (d)...
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? 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 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....
Question 5Which one of the following statements is correct? 1) The payback period ignores the time value of money. 2) A longer payback period is preferred over a shorter payback period. 3) The payback rule states that you should accept a project if the payback period is less than one year. 4) The payback rule is biased in favor of long-term projects. 5) The payback period considers the timing and amount of all of a project's cash flows. Question 6A firm has $6 Billion in debt...
QUESTION 1 Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT? A project's IRR increases as the WACC declines. A project's NPV increases as the WACC declines. A project's MIRR is unaffected by changes in the WACC. A project's regular payback increases as the WACC declines. A project's discounted payback increases as the WACC declines. QUESTION 2 Gul Corp. considers the following capital structure optimal: 40% debt; 50% equity; and 10% preferred...
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...
Question 30 (1 point) 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 project's regular IRR is found by compounding the initial cost at the WACC to find the terminal value (TV), then discounting the TV at the WACC. A project's regular IRR is found by compounding the cash inflows at the WACC to find the present value (PV), then discounting the...
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? The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The net present value method (NPV) is generally regarded by academics...