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

question 69

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 compounding the initial cost at the WACC to find the terminal value (TV),then discounting the TV at the WACC.
• B) A project's regular IRR is found by compounding the cash inflows at the WACC to find the present value (PV),then discounting the TV to find the IRR.
• C) If a project's IRR is smaller than the WACC,then its NPV will be positive.
• D) A project's IRR is the discount rate that causes the PV of the inflows to equal the project's cost.
• E) If a project's IRR is positive,then its NPV must also be positive.

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Definitions:

Computer Models

Simulations created on computers to mimic or predict complex real-world phenomena, widely used in various scientific disciplines, including weather forecasting, climate change studies, and engineering.

Subducted Plates

Tectonic plates that are forced underneath another plate into the Earth's mantle at convergent boundaries.

Core-Mantle Boundary

The distinct boundary between the Earth's solid silicate mantle and its liquid iron-nickel outer core, located approximately 2,900 kilometers below the Earth's surface.

Material Rises

The upward movement of substances due to thermal buoyancy, tectonic forces, or other mechanisms within the Earth's mantle or crust, or in atmospheric or aquatic contexts.