Which Statement About a Project's IRR Is Correct? Assume That

question 12

Multiple Choice

Which statement about a project's IRR 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.

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Definitions:

Registers

High-speed storage areas in the CPU that store very small amounts of data and instructions for short periods.

The ALU

An Arithmetic Logic Unit (ALU) is a digital circuit used to perform arithmetic and logic operations in computers.

Mathematical Calculations

The process of using mathematical symbols and methods to perform quantifiable measurements and solve numerical problems.

Logical Comparisons

The process of evaluating two or more variables by applying logical operators to determine a true or false outcome.