If the calculated Net Present Value $($NPV$)$ is negative, the cost of capital $($AKA$,$ required rate of return or

discount rate$)$ used to evaluate the project is

A$.$ equal to the Internal Rate of Return.

B$.$ greater than the Internal Rate of Return.

C$.$ less than the Internal Rate of Return.

Assume a project has normal cash flows. All else equal, which of the following statements is

CORRECT?

A$.$ For a project with normal cash flows, any change in the WACC will change both the NPV

and the IRR.

B$.$ A project's IRR increases as the WACC declines.

C$.$ A project's NPV increases as the WACC declines.

D$.$ Both the NPV and IRR methods both assume that cash flows can be reinvested at the

WACC.

E$.$ None of the above. Each statement is INCORRECT or FALSE.

Caprock Manufacturing's Quicksilver Project costs $$52,442\mathrm{.}28.$ The firm's cost of capital, $r_c,$ is $15\%$ and the

project's NPV $=$$$0\mathrm{.}00.$ The project's expected cash flows are listed below:

What is the project's Internal Rate of Return $($IRR$)?$

A$.10\%$

B$.12\%$

C$.14\%$

D$.15\%$

E$.16\%$

Project A has an Internal Rate of Return, IRR, of $15$ percent. Project B has an IRR of $18$ percent. Both

projects have the same risk. Which of the following statements is most correct?

A$.$ If the weighted average cost of capital, WACC$=r_c,$ is $10$ percent, both projects will have a

positive net present value, NPV$,$ and the NPV of project B will be larger than the NPV of Project A$.$

B$.$ If the weighted average cost of capital, WACC$=r_c,$ is $15$ percent, the NPV of project $B$ will be

larger than the NPV of Project A$.$