Zwile Nkosi, a junior financial analyst made the following statements to her manager about the principles of capital budgeting.

Statement 1: The cost of capital is the opportunity cost of using funds to invest in projects.

Statement 2: The lower the required rate of return used to calculate it, the lower the calculated NPV will be.

Statement 3: In order to maximize firm value, management should invest in new assets when cash flows from the assets are discounted at the firm's cost of capital and result in a positive NPV.

Should the manager agree or disagree with Zwile's statements?

A.

Statement 1	Statement 2	Statement 3
Agree	Disagree	Agree

B.

Statement 1	Statement 2	Statement 3
Agree	Agree	Agree

C.

Statement 1	Statement 2	Statement 3
Disagree	Agree	Agree

D.

Statement 1	Statement 2	Statement 3
Agree	Agree	Disagree