Assume a project has normal cash flows (i e , the initial cash flow is negative, and all other cash flows are positive) Which of the following statements is most correct All else equal, a project's IRR increases as the cost of capital declines All else equal, a project's NPV increases as the cost of capital declines All else equal, a project's payback period increases as the cost of capital declines Answers a and b are correct Answers b and c are correct

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Question: Assume a project has normal cash flows (i.e., the initial cash flow is negative, and all other cash flows are positive). Which of the following

Assume a project has normal cash flows (i.e., the initial cash flow is negative, and all other cash flows are positive). Which of the following statements is most correct?

All else equal, a project's IRR increases as the cost of capital declines.
All else equal, a project's NPV increases as the cost of capital declines.
All else equal, a project's payback period increases as the cost of capital declines.
Answers a and b are correct.
Answers b and c are correct.

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