Which of the Following Statements Is CORRECT? Assume That All

question 32

Multiple Choice

Which of the following statements is CORRECT? Assume that all projects being considered have normal cash flows and are equally risky.

• A) If a project's IRR is equal to its WACC,then,under all reasonable conditions,the project's NPV must be negative.
• B) If a project's IRR is equal to its WACC,then under all reasonable conditions,the project's IRR must be negative.
• C) If a project's IRR is equal to its WACC,then under all reasonable conditions the project's NPV must be zero.
• D) There is no necessary relationship between a project's IRR,its WACC,and its NPV.
• E) When evaluating mutually exclusive projects,those projects with relatively long lives will tend to have relatively high NPVs when the cost of capital is relatively high.

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Definitions:

Checklist

A list of items or tasks that are checked off as they are completed or noted; often used for systematic verification or assessment.

Organizational Psychology

A field of psychology that studies human behavior in workplace settings and applies psychological theories and principles to organizations.

Personnel Psychology

A branch of psychology focused on the workplace, dealing with issues such as hiring, assessment, and motivation of employees.

Human Factors Psychology

A field of psychology focusing on designing products and creating work environments that complement the human body and psychological capabilities.