Assume a Project Has Normal Cash Flows

question 104

Multiple Choice

Assume a project has normal cash flows.All else equal,which of the following statements is CORRECT?

• A) A project's IRR increases as the WACC declines.
• B) A project's NPV increases as the WACC declines.
• C) A project's MIRR is unaffected by changes in the WACC.
• D) A project's regular payback increases as the WACC declines.
• E) A project's discounted payback increases as the WACC declines.

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Definitions:

Particular Product

A specific item or good offered for sale by a business.

Labor Rate Variance

The difference between the actual cost of labor and the expected (or budgeted) cost of labor based on standard rates and hours.

Labor Standards

Benchmarks or norms for the amount of labor time required to perform a certain task or produce a certain amount of goods.

Particular Product

A specific item or good that is produced and offered for sale by a business.