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

question 106

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) A project's regular IRR is found by discounting the cash inflows at the cost of capital to find the present value (PV), then compounding this PV to find the IRR.
• B) If a project's IRR is greater than the WACC, then its NPV must be negative.
• C) To find a project's IRR, we must solve for the discount rate that causes the PV of the inflows to equal the PV of the project's costs.
• D) To find a project's IRR, we must find a discount rate that is equal to the cost of capital.
• E) 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.

---

Definitions:

Transnational Companies

Corporations that operate and have assets in more than one country, often managing production and delivering services in various international locations.

Global Strategies

Plans developed by organizations to operate and compete on a worldwide scale, taking advantage of global opportunities and managing global challenges.

Circumstances

The specific conditions or facts affecting a situation or event at a particular time.

Imports

Goods or services brought into one country from another for sale.