You are given a project with the following projected cash flows for a project with a 25% discount rate (pay special attention to the signs of the cash flows):

Year 0 = 10,000,000

Year 1 = -3,000,000

Year 2 = -3,000,000

Year 3 = -3,000,000

Year 4 = -3,000,000

You are debating which capital budgeting project evaluation tool to use on the project. Which of the following statements is true?

A.

Of the methods we learned in class, we can only use NPV to evaluate the project.

B.

If the firm has a payback period criterion of two years or less, we should accept the project, because the total cash flows would be positive after two years in both the payback and discounted payback methods.

C.

IRR can be used to evaluate this project because 1) the cash flow signs only change once and 2) its only a single project so we dont have to worry about reinvestment rate concerns

D.

If this is a positive-NPV project, it follows that the IRR must be higher than the 25% discount rate of the project.