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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Definitions:

Constitutionality

Pertaining to the adherence or conformity to the principles or provisions of a constitution, especially the United States Constitution.

Florida

A state located in the southeastern region of the United States, known for its warm climate, beaches, and as a popular tourist destination.

Seminole Indians

A Native American people originally from Florida, known for their resistance against U.S. military campaigns during the Seminole Wars.

Spanish Rule

The period of colonial dominion over various territories by the Spanish Empire, characterized by significant cultural, social, and political changes in the regions under Spain's control.