Assume a Project Has Normal Cash Flows (I

question 115

Multiple Choice

Assume a project has normal cash flows (i.e. ,the initial cash flow is negative,and all other cash flows are positive) .Which of the following statements is most correct?

• A) All else equal,a project's IRR increases as the required rate of return declines.
• B) All else equal,a project's NPV increases as the required rate of return declines.
• C) All else equal,a project's IRR is unaffected by changes in the required rate of return.
• D) Answers a and b are both correct.
• E) Answers b and c are both correct.

---

Definitions:

Unhappy People

Individuals who consistently experience a state of sadness or discontentment, lacking joy in their lives.

Democratic Vote Approach

A decision-making process in which all members have a vote, with the majority deciding the outcome.

Political System

The system of government by which a country or community is governed.

Checks And Balances

A system in which the different parts of an organization or government have powers that affect and control the other parts so that no part can become too powerful.