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

question 54

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) a project's regular irr is found by discounting the cash inflows at the cost of capital to find the present value (pv), then compounding this pv to find the irr.
• B) if a project's irr is greater than the wacc, then its npv must be negative.
• C) to find a project's irr, we must solve for the discount rate that causes the pv of the inflows to equal the pv of the project's costs.
• D) to find a project's irr, we must find a discount rate that is equal to the cost of capital.
• E) a project's regular irr is found by compounding the cash inflows at the cost of capital to find the terminal value (tv), then discounting this tv at the cost of capital.

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Definitions:

Developed Nations

Countries with advanced industrial economies, high living standards, well-established infrastructures, and stable governments.

Federal Budget Deficit

The federal budget deficit occurs when a government's expenditures exceed its revenues within a given fiscal year, leading to borrowing to cover the gap.

Declined Substantially

A phrase indicating a significant decrease or reduction in the quantity, value, or quality of something.

Discretionary Fiscal Policy

A government strategy involving adjusting its spending levels and tax rates to monitor and influence a nation's economy.