Assume a Project Has Normal Cash Flows (That Is, the Initial

question 51

Multiple Choice

Assume a project has normal cash flows (that is, the initial cash flow is negative, and all other cash flows are positive) . Which of the following statements is most correct?

• A) All else equal, a project's IRR increases as the cost of capital declines.
• B) All else equal, a project's NPV increases as the cost of capital declines.
• C) All else equal, a project's MIRR is unaffected by changes in the cost of capital.
• D) Answers a and b are correct.
• E) Answers b and c are correct.

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