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Which of the following ARE correct (Multiple Answer)? a. The NPV method makes the better reinvestment assumption compared to IRR b. The IRR method makes
Which of the following ARE correct (Multiple Answer)? a. The NPV method makes the better reinvestment assumption compared to IRR b. The IRR method makes the better reinvestment assumption compared to NPV c. If the WACC crossover rate for two mutually exclusive project, the NPV and IRR methods may show discrepancies towards the acceptance of the project. e. When there are discrepancies, one should use the NPV method because of the better reinvestment assumption. QUESTION 7 What are considered incremental cash flows? A. Opportunity cost O B. Cannibalization cost O C. Sunk costs OD. Operating cash flows for accepting the project QUESTION 8 What ARE(Multiple Answer) considered initial costs in the FCFO( free cash flow for year 0)? a. Net operating working capital (NOWC) b. Change in Net operating working capital c. Capital expenditure d. Operating cash flow O e. Terminal costs
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