Question: 6) Which statements regarding NPV valuation are correct? A The NPV is calculated by discounting the future expected cash-flows with the risk-free rate of return

6) Which statements regarding NPV valuation are correct?

A The NPV is calculated by discounting the future expected cash-flows with the risk-free rate of return

B A negative NPV means that the investment is financially not profitable

C The cost of debt of a company in the NPV calculation is approximated with the company's beta.

D NPV assumes a fixed path into the future and does not incorporate the financial value of real options that are open to investors over the time of an investment

E Future cash-flows should be converted to home currency using the spot rate because future exchange rates are difficult to forecast

F When evaluating a company, future cash flows are predicted only for the first years. Then a perpetuity value is added.

NOTE: Statements - more than one can be correct

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