A Stand-Alone Capital Project Has the Following Projected Cash Flows

question 103

Multiple Choice

A stand-alone capital project has the following projected cash flows: If the firm's cost of capital is 14%, which of the following statements is true?

• A)the IRR is greater than the cost of capital and the project should be undertaken
• B)the project should be rejected because the IRR is 12%, which is less than the project's cost of capital
• C)the IRR is less than 12% and the project should be undertaken
• D)the NPV of the project is positive and the project should be undertaken