Which of the Following Statements Is CORRECT

question 26

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 that 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 higher IRR probably has more of its cash flows coming in the later years.
• E) 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:

Date Of Completion

The specified day on which a project, task, or assignment is formally finished or due to be delivered.

Complex Task

A task that involves multiple steps, requires significant mental or physical effort, and may involve handling uncertain conditions.

Project Components

The distinct elements or parts that make up a project, each necessary for its completion and success.

Certain Sequence

A specific order or arrangement in which related events, tasks, or processes are intended to occur.