Question
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows. a. A projects NPV is found by compounding the cash inflows at the IRR to find the terminal value (TV), then discounting the TV at the WACC. b. The lower the WACC used to calculate a projects NPV, the lower the calculated NPV will be. c. If a projects NPV is less than zero, then its IRR must be less than the WACC. d. If a projects NPV is greater than zero, then its IRR must be less than zero. e. The NPV of a relatively low-risk project should be found using a relatively high WACC. Please explain your response.
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