Which of the Following Statements Is CORRECT? Assume That All

question 32

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 NPV must be negative.
• B) If a project's IRR is equal to its WACC,then under all reasonable conditions,the project's IRR must be negative.
• C) If a project's IRR is equal to its WACC,then under all reasonable conditions the project's NPV must be zero.
• D) There is no necessary relationship between a project's IRR,its WACC,and its NPV.
• E) 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.

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Definitions:

Frustration-Aggression Principle

A theory suggesting that frustration often leads to aggressive behavior as the individual seeks to eliminate the source of their frustration.

Blood Alcohol

The amount of alcohol present in the bloodstream, typically measured to determine levels of intoxication or impairment.

Discrimination

The unfair or biased treatment of diverse groups of individuals, particularly based on race, age, or gender.

Stereotyping

The act of categorizing individuals into specific groups based on generalized traits, without acknowledging individual variations.