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Assuming a specific single project with normal cash flows and a cost of capital of 10%, which of the following statements will ALWAYS be true:

Assuming a specific single project with normal cash flows and a cost of capital of 10%, which of the following statements willALWAYSbe true: (Note: more than one of the following statements may be true; you must record ALL of the statements that are true to receive any credit. That is, if statements a, b and c areALWAYStrue, you must record, A, B, C as the correct answers to this problem to receive any credit. Any other letter or combination of letters will be marked wrong).

Question 25 options:

If NPV > 0, then IRR > 0.

If NPV > 0 at the stated cost of capital (i.e., 10%), then NPV will also be > 0 at a cost of capital of 12%.

If NPV > 0, then Payback Period > 0.

If NPV > 0, then Profitability Index > 0.

If NPV > 0, then a simple sum of the cash inflows of the project will always be greater than the cost of the project (i.e, the year 0 cash flow).

any takers?

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