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

question 42

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) If Project A has a higher IRR than Project B,then Project A must have the lower NPV.
• B) If Project A has a higher IRR than Project B,then Project A must also have a higher NPV.
• C) The IRR calculation implicitly assumes that all cash flows are reinvested at the WACC.
• D) The IRR calculation implicitly assumes that cash flows are withdrawn from the business rather than being reinvested in the business.
• E) If a project has normal cash flows and its IRR exceeds its WACC,then the project's NPV must be positive.

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Definitions:

Schizoid Personalities

Individuals characterized by a lack of interest in social relationships, a tendency towards a solitary lifestyle, and emotional coldness.

Cognitive-Behavioral Theorists

Scholars and practitioners who believe that psychological problems arise from faulty or negative thinking and behaviors, and that changing these can lead to improved mental health.

Emotional Cues

External or internal signals that indicate the emotional state of an individual or are meant to provoke an emotional response.

Schizoid Disorders

A cluster of mental conditions characterized by a long-standing pattern of detachment from social relationships and a limited range of emotional expression.