Which of the Following Statements Is Correct? Assume That the Project

question 96

Multiple Choice

Which of the following statements is correct? Assume that the project being considered has normal cash flows,with one outflow followed by a series of inflows.

• A)The higher the WACC used to calculate the NPV, the lower the calculated NPV will be.
• B)If a project's NPV is greater than zero, then its IRR must be less than the WACC.
• C)If a project's NPV is greater than zero, then its IRR must be less than zero.
• D)The NPVs of relatively risky projects should be found using relatively low WACCs.

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Definitions:

Selfish

Concerned excessively or exclusively with oneself, often at the expense of others.

Crowded Street Corner

A specific location where a large number of people gather or pass, often leading to a congested space.

Populated Street Corner

An urban location characterized by a high density of people, typically a bustling intersection or area with commercial or social activity.

Time Pressure

The stress or urgency felt by individuals when they have insufficient time to complete a task or make a decision.