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• D) The IRR calculation implicitly assumes that cash flows are withdrawn from the business rather than being reinvested in the business.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:

Accurate Claims

Insurance or billing claims that are correctly and truthfully reported, ensuring proper handling and processing.

Blue Cross

A health insurance company known for providing healthcare plans and insurance services to individuals in various regions.

Hospital Expenses

Costs associated with receiving medical care in a hospital, which may include fees for room stays, medical procedures, medications, and the use of hospital equipment.

Gatekeeper

One who regulates access to someone or something; in insurance, a primary care physician who coordinates the patient’s referral to specialists and hospital admissions.