If a Firm Undertakes a Project with Ordinary Cash Flows

question 8

Multiple Choice

If a firm undertakes a project with ordinary cash flows and estimates that the firm has a positive NPV, then the IRR will be:

• A) less than the cost of capital.
• B) greater than the cost of capital.
• C) greater than the cost of the project.
• D) cannot be determined from this information

---

Definitions:

Total Revenue

Total Revenue, in a rephrased definition, represents the aggregate earnings a company receives from selling its products or services, before any expenses are subtracted.

Market Price

The going rate at which a particular market offers to buy or sell an asset or service.

Average Revenue

The revenue earned per unit of output sold; calculated by dividing the total revenue by the number of units sold.

Total Revenue

The total amount of money received by a firm from selling its goods or services.