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

question 55

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)If Project A has a higher IRR than Project B, then Project A must have the lower NPV.
• B)If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
• C)The IRR calculation implicitly assumes that all cash flows are reinvested at the WACC.
• D)If a project has normal cash flows and its IRR exceeds its WACC, then the project's NPV must be positive.

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Definitions:

Tympanic

Relating to the tympanum or eardrum, part of the middle ear involved in hearing.

Vestibule

An entrance hall or other open area in a building used by the public, particularly the space at the entrance to a structure.

Organ of Corti

The Organ of Corti is the sensory organ located within the cochlea of the inner ear, responsible for converting sound vibrations into neural signals.

Decibels

A unit of measurement for the intensity of sound, representing the ratio of a sound pressure level to a reference level.