Which of the Following Statements Is CORRECT? Assume That the Project

question 76

Multiple Choice

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 higher the cost of capital used to calculate the NPV, the lower the calculated NPV will be.
• B) If a project's NPV is greater than zero, then its IRR must be less than the cost of capital.
• C) If a project's NPV is greater than zero, then its IRR must be less than zero.
• D) The NPVs of relatively risky projects should be found using relatively low costs of capital.
• E) A project's NPV is generally found by compounding the cash inflows at the cost of capital to find the terminal value (TV), then discounting the TV at the IRR to find its PV.

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Definitions:

Socialization

The method through which people acquire and assimilate the standards, values, actions, and social competencies relevant to their community.

Significant Other

A person of great importance in one's life, typically a romantic or life partner.

Generalized Other

A concept in sociology that refers to the general notion that a person has of the common expectations and attitudes in society.

Adaptation

Is the process of changing one’s actions to maximize the degree to which an environment satisfies one’s needs and interests.