A Project Has an Up-Front Cost of $100,000

question 72

Multiple Choice

A project has an up-front cost of $100,000. The project's WACC is 12 percent and its net present value is $10,000. Which of the following statements is most correct?

• A) The project should be rejected since its return is less than the WACC.
• B) The project's internal rate of return is greater than 12 percent.
• C) The project's modified internal rate of return is less than 12 percent.
• D) All of the above answers are correct.
• E) None of the above answers is correct.

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