Which of the Following Statements Is CORRECT? Assume That All

question 71

Multiple Choice

Which of the following statements is CORRECT? Assume that all projects being considered have normal cash flows and are equally risky.

• A) If a project's IRR is equal to its WACC, then under all reasonable conditions, the project's IRR must be negative.
• B) If a project's IRR is equal to its WACC, then under all reasonable conditions the project's NPV must be zero.
• C) There is no necessary relationship between a project's IRR, its WACC, and its NPV.
• D) When evaluating mutually exclusive projects, those projects with relatively long lives will tend to have relatively high NPVs when the cost of capital is relatively high.
• E) If a project's IRR is equal to its WACC, then, under all reasonable conditions, the project's NPV must be negative.

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Definitions:

Colonization Law

Colonization Law consists of regulations and statutes established by colonial powers to govern the settlement and administration of colonies, often including land distribution and treatment of indigenous peoples.

1824

The year notable for events such as the U.S. presidential election, which was decided by the House of Representatives under the "corrupt bargain" allegations.

Manifest Destiny

A 19th-century doctrine or belief that the expansion of the US throughout the American continents was both justified and inevitable.

Territorial Expansion

The process or action by which a country increases its land area through acquisition or annexation.