Which of the Following Statements Is CORRECT? Assume That All

question 71

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 IRR must be negative.
• B) If a project's IRR is equal to its WACC, then under all reasonable conditions the project's NPV must be zero.
• C) There is no necessary relationship between a project's IRR, its WACC, and its NPV.
• D) 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.
• E) If a project's IRR is equal to its WACC, then, under all reasonable conditions, the project's NPV must be negative.

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Definitions:

Self-awareness

The conscious knowledge of one's own character, feelings, motives, and desires, which can improve personal and interpersonal effectiveness.

Power Dimension

Refers to the varied ways in which power is distributed and exerted within societies or organizations.

Hofstede's Framework

A model that identifies and analyzes six cultural dimensions that distinguish countries and their cultures from one another.

High-context Cultures

Cultures where communication relies heavily on underlying unspoken context, shared traditions, and non-verbal cues.