True/False and Why:

1. An IRR lower than the WACC should always be rejected.

2. The IOS chart tracks total capital expended on the x-axis and NPV on the y-axis.

3. It is possible that the firm may be unable to invest despite an IRR higher than WACC.

4. Break points occur when total capital expended passes a threshold which makes it more risky and thus more costly.

5. Firms should always leave their options open for adding to any debt or equity capital position.