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.

---

Definitions:

Z-Scores

A standardized score that indicates the number of standard deviations a raw score is above or below the mean.

Raw Score Distribution

The unadjusted scores of all participants in a study or on a test, displayed in the form of a distribution to analyze general trends.

Percentile Rank

A score indicating the percentage of scores in its frequency distribution that are equal to or lower than it, providing a relative position of an individual's score in a group.

Standard Deviation

A statistical measure of the dispersion or spread of a set of data points in relation to their mean.