Which of the Following Statements Is CORRECT? Assume That the Project

question 87

Multiple Choice

Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows,with one outflow followed by a series of inflows.

• A) A project's NPV is generally found by compounding the cash inflows at the WACC to find the terminal value (TV),then discounting the TV at the IRR to find its PV.
• B) The higher the WACC used to calculate the NPV,the lower the calculated NPV will be.
• C) If a project's NPV is greater than zero,then its IRR must be less than the WACC.
• D) If a project's NPV is greater than zero,then its IRR must be less than zero.
• E) The NPVs of relatively risky projects should be found using relatively low WACCs.

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Definitions:

Hydrogenation

The chemical reaction that adds hydrogen (H2) across unsaturated bonds in molecules, such as converting alkenes to alkanes.

ΔH°

The standard enthalpy change of a reaction, measured under standard conditions (1 atm, 298.15K), representing the difference in enthalpy between products and reactants.

Stability

The resistance of a chemical compound to change in its chemical structure or composition under specific conditions.

Descriptive Term

A word or phrase that describes or characterizes an object, situation, or concept without expressing its inherent nature.