Question

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

The lower the cost of capital used to calculate a project's NPV, the lower the calculated NPV will be.

If a project's NPV is less than zero, then its IRR must be less than the cost of capital.

If a project's NPV is greater than zero, then its IRR must be less than zero.

The NPV of a relatively low-risk project should be found using a relatively high cost of capital.

Answer #1

Option B is correct

If a project's NPV is less than zero, then its IRR must be less than the cost of capital. The statement is correct. On the other hand, if a project's NPV is greater than zero, then its IRR must be greater than the cost of capital.

Option A is incorrect
because The lower the cost of capital used to calculate a
project's NPV, the **higher** the calculated NPV will
be.

Option C is incorrect
because If a project's NPV is greater than zero, then its
IRR must be **more** than zero.

Option D is incorrect
because The NPV of a relatively low-risk project should be
found using a relatively **low** cost of capital.

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 NPVs of relatively risky projects should be found using
relatively low costs of capital.
b.
If a project's NPV is greater than zero, then its IRR must be
less than the cost of capital.
c.
The higher the cost of capital used to calculate the NPV, the
lower the calculated NPV will...

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 NPV of a relatively low-risk project should be found
using a relatively high WACC
B: The lower the WACC used to calculate it, the lower the
calculated NPV will be If a project’s NPV is greater than zero,
then its IRR must be less than zero
C: If a project’s NPV is...

Which of the following statements is correct? Assume the project
being considered has normal cash flows, with one outflow, followed
by a series of inflows:
If a project’s NPV is > 0, the IRR must be less than WACC
The higher the WACC used to calculate NPV, the lower the
calculated NPV will be
The NPV’s of relatively risky projects should be found using
relatively low WACC’s
If a project’s NPV is > 0, the IRR must be less than...

If you assume that a project being considered has normal cash
flows, with one outflow followed by a series of inflows, which
statement would be correct? Question 11 options:
a) The lower the cost of capital used to calculate a project's
NPV, the lower the calculated NPV will be.
b) If a project's NPV is less than zero, then its IRR must be
less than the cost of capital.
c) A project’s NPV is found by compounding the cash inflows...

If a project being considered has normal cash flows, with one
outflow followed by a series of inflows, which of the following
statements is CORRECT?
A If a project's NPV is greater than zero, then its IRR must be
less than the WACC.
B If a project's NPV is greater than zero, then its IRR must be
less than zero.
C The higher the WACC used to calculate the NPV, the lower the
calculated NPV will be.
D A project's...

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 IRR calculation implicitly
assumes that all cash flows are reinvested at the WACC. b. If a
project has normal cash flows and its IRR exceeds its WACC, then
the project’s NPV must be positive. c. If Project A has a higher
IRR than Project B, then Project A must also have a...

Which of the following is statements related to capital
budgeting is not true? A project is considered acceptable if its
NPV is greater zero. A project whose NPV is greater than its IRR is
should be accepted. Both the NPV method and the IRR method of
evaluating capital investment projects are widely considered to be
superior to the payback method. An NPV of zero signifies that the
project's cash flows are just sufficient to repay the invested
capital and to...

1. Which of the following statements is correct?
a. A project with conventional cash flows is one with an initial
cash outflow followed by one or more cash inflows.
b. The NPV method determines how much the future value of cash
inflows exceeds the present value of costs.
c. All the answers are correct.
d. When two projects are independent, accepting one project
implicitly eliminates the other.
e. Conventional cash flow patterns could lead to conflicting
decisions by NPV and...

A stand-alone capital project has the following projected cash
flows:
Year 0 1 2 3 Cash flow ($4,000) $1,500 $1,200 $2,395
If the firm's cost of capital is 14%, which of the following
statements is true?
a.the IRR is greater than the cost of capital and the project
should be undertaken
b.the project should be rejected because the IRR is 12%, which is
less than the project's cost of capital
c.the IRR is less than 12% and the project should...

Which of the following statements is
not correct?
Group of answer choices
The binomial option pricing model when taken to the limit
becomes the Black-Scholes option pricing model.
The Black-Scholes model uses a continuous time discount
factor.
The binomial option pricing model use a ratio of the range
values as the hedge ratio.
The Black-Scholes model is related to a heat transfer equation
and Brownian molecular motion.
The Black Scholes model only estimates the intrinsic value of
the call option....

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