If the IRR is greater than the cost of capital then:

The project will have a negative NPV when cash flows are discounted by the cost of capital.

The project will have a profitability index greater than one when cash flows are discounted by the cost of capital.

The Accounting Rate of Return will be less than one.

The Accounting Rate of Return will always equal the IRR.

What is the formula for the profitability index: ________________________

If the profitability index is less than one then the IRR must be less than the cost of capital: True/False

Circle all statements that are true: When future cash flows are discounted by the cost of capital,

The higher the discount rate, the lower the present value of the future cash flows.

The higher the discount rate, the higher the present value of the future cash flows.

The lower the discount rate, the lower the Profitability Index of the project.

The lower the discount rate, the higher the Profitability Index of the project.