Assume a Project Has Normal Cash Flows

question 34

Multiple Choice

Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT?

• A) a project's npv increases as the cost of capital declines.
• B) a project's mirr is unaffected by changes in the cost of capital.
• C) a project's regular payback increases as the cost of capital declines.
• D) a project's discounted payback increases as the cost of capital declines.
• E) a project's irr increases as the cost of capital declines.

---

Definitions:

Correlation Coefficient

An index of how strongly two variables are related to each other.

Alternate Forms Reliability

A measure of reliability obtained by administering different versions of an assessment tool to the same group of individuals.

Test-retest Reliability

A measure of consistency where a test is administered twice to the same participants under similar conditions, and scores are compared.

Interrater Reliability

A measure of how consistently different raters or observers evaluate the attributes or performances of subjects or items.