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7) For each of the below, indicate True or False. No explanation is required. a) For a project with risk free cash flows, the appropriate
7) For each of the below, indicate True or False. No explanation is required. a) For a project with risk free cash flows, the appropriate discount rate is the project's IRR. b) For a risky project, the IRR rule states that you should accept the project if the cost of capital is greater than the required rate of return. c) For a risky project, the IRR is always greater than the risk free rate, even if the NPV is negative. d) If project A has a higher IRR than B, then it will also have a higher NPV. e) Given: i) project A is riskier than project B and thus has a higher required rate of return. ii) project A has a higher IRR than B. Statement: It is possible that the IRR rule accepts project B but not A
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