Which of the Following Statements Is CORRECT

question 33

Multiple Choice

Which of the following statements is CORRECT?

• A) If a project with normal cash flows has an IRR greater than the WACC,the project must also have a positive NPV.
• B) If Project A's IRR exceeds Project B's,then A must have the higher NPV.
• C) A project's MIRR can never exceed its IRR.
• D) If a project with normal cash flows has an IRR less than the WACC,the project must have a positive NPV.
• E) If the NPV is negative,the IRR must also be negative.

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Definitions:

Price Ceiling

a government-imposed limit on how high a price can be charged for a product, service, or commodity, typically to protect consumers from excessive costs.

Rationing Mechanism

A system used to distribute scarce goods or services among a population, often seen in economies facing shortages.

Price Floor

A regulatory measure that sets the lowest legal price a commodity can be sold at.

Tax

Compulsory financial charges or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures.