10-12

of netained carnings is cost to the that exist for the company esternal egaity None of the above k curreatly sells for $23.00 per share, the commpasy 7.5%. New stock can be sold to the B. 1.12% D.20.35% E. 21.47% y. motually exclusive projects, both of which have normal cash flows. Project A has an IRR of 11%, while Preject A has a NPV higher tham Project th AC B's NPV when the WACC is S%, the projects have the same information, which of the following statements is CO A's NPV will be higher than Projects B's RRECT? NPV. Given this If the WACC is l3%, Project If w A. B. the WACC is 9%, Project A's NPV will be higher than Project's B's If the WACC is 6% Projects B's NPV will be higher than Project A's is greater than 14%, Project A's IRR will exceed Project Bs difference between MIRR and regular IRR is the MIRR assumes that cash inflows are assume reinvestment at a rate close to cost of equity, cost of retained carnings, IRR D. If the WACC E. If the WACC is 9%, Project B's NPV will be higher than Proyect Ak 11. The primary atSince it is theis generally closer to the "true" atwhereas the regular IRR assumes reinvestment at terally or rate of return a project will provide. B. Cost of equity, cost o C. MIRR, IRR, MIRR, IRR D. IRR, WACC, IRR, MIRR E. WACC, IRR, wACC, MIRR earnings, MIRR 12. Choose the following correct statement(s) regarding the payback period: money has a time value, discounted payback will be shorter than regular paybachk B. One drawback of the C. If a D. Regular payback ignores cash flows beyond the payback period, but method is that it ignores time value of money project's payback is positive, it should be rejected because it must have a negative NPV discounted payback overcomes t E. All of the above are correct