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.

---

Definitions:

Business Transaction

A financial exchange or activity that occurs between parties in the course of business.

Three-Factor Theory

A psychological theory that categorizes the sources of motivation into three factors: autonomy, competence, and relatedness.

Cultural Determinant

A factor, often related to beliefs, values, or norms, within a culture that influences behaviors or outcomes within that society.

Ideal Image

A person's conception of something in its absolute perfection or an entity's representation of itself or its products as perfect or near perfect.