A B D E F G H L M N O P 1 2 3 Problem 1/5 points) 5 7 3 You are using a two-stage valuation model to forecast free cashflows for an investment project. First, you explicitly forecast free cashflows for the first five years of your project's life. Second, for all cashflows beyond year 5, you estimate terminal value via a growing perpetuity by assuming that cashflows will grow at a constant positive rate (g) forever after year 5. Assuming that the cashflow in year 5 is positive, which of the following statement(s) are true? 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 1. The higher the perpetual growth rate (g), the higher the NPV. II. For positive-NPV projects, the perpetual growth rate (g) should typically exceed the discount rate. III. The present value estimate of terminal value is typically less sensitive to a change in the discount rate than the aggregate present value of cashflows in the explicit forecast. a) I only b) Il only c) Ill only d) I and III only e) None