Which of the Following Statements Is CORRECT

question 10

Multiple Choice

Which of the following statements is CORRECT?

• A) A project's NPV is found by compounding the cash inflows at the IRR to find the terminal value (TV), then discounting the TV at the WACC.
• B) The lower the WACC used to calculate a project's NPV, the lower the calculated NPV will be.
• C) If a project's NPV is less than zero, then its IRR must be less than the WACC.
• D) If a project's NPV is greater than zero, then its IRR must be less than zero.

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Definitions:

Statistics

Statistics is the branch of mathematics dealing with the collection, analysis, interpretation, and presentation of masses of numerical data.

Sample Size

Sample size refers to the number of observations or individuals included in a statistical sample.

Null Hypothesis

A hypothesis that assumes no significant difference or relationship exists between certain variables; it's the default assumption to be tested against.

Research Hypothesis

A statement made by a researcher that predicts a relationship between two or more variables.