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

question 55

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)If Project A has a higher IRR than Project B, then Project A must have the lower NPV.
• B)If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
• C)The IRR calculation implicitly assumes that all cash flows are reinvested at the WACC.
• D)If a project has normal cash flows and its IRR exceeds its WACC, then the project's NPV must be positive.

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Definitions:

PERT

A technique for estimating the duration and managing the tasks in a project to effectively allocate resources and timelines. (Rephrased Definition)

PERT Chart

Stands for Program Evaluation Review Technique chart, a tool used in project management to map out and analyze the tasks involved in completing a project.

Critical Events

Significant occurrences that have a profound impact on processes or outcomes, often necessitating immediate attention or action.

Network

A group or system of interconnected people or things, often used to refer to digital communication systems or social structures.