Which of the Following Statements Is Correct

question 64

Multiple Choice

Which of the following statements is correct?

• A) For a project with normal cash flows, any change in the WACC will change both the NPV and the IRR.
• B) To find the MIRR, we first compound cash flows at the regular IRR to find the TV, and then we discount the TV at the WACC to find the PV.
• C) The NPV and IRR methods both assume cash flows can be reinvested at the WACC. However, the MIRR method assumes reinvestment at the MIRR itself.
• D) If two projects have the same cost, and if their NPV profiles cross in the upper right quadrant, then the project with the LOWER IRR probably has more of its cash flows coming in the later years.

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Definitions:

Barrier Methods

Forms of contraception that physically block sperm from reaching an egg, such as condoms or diaphragms.

Diaphragm

A dome-shaped, flexible barrier that covers the cervix to prevent sperm from entering the uterus, used as a contraceptive method.

Birth Control Shot

An injectable, hormonal method of birth control that is used to prevent pregnancy for 12 weeks.

Implanon

A brand of contraceptive implant that releases a hormone to prevent pregnancy, inserted under the skin of a woman's upper arm.