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

question 66

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) The higher the WACC used to calculate the NPV, the lower the calculated NPV will be.
• B) If a project's NPV is greater than zero, then its IRR must be less than the WACC.
• C) If a project's NPV is greater than zero, then its IRR must be less than zero.
• D) The NPVs of relatively risky projects should be found using relatively low WACCs.
• E) 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.

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Definitions:

Daily Work Activities

Routine tasks or responsibilities that are part of an individual's everyday job.

Interpersonal Skills

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Job Satisfaction

The level of contentment employees feel about their work, which can affect their performance and overall well-being.

Reduce Turnover

Strategies and practices aimed at decreasing the rate at which employees leave a company, thereby improving retention and reducing the costs associated with hiring and training new staff.