Q19 B is incorrect, Q30 B is also incorrect

Tyically, according to the toxi, the MCC schedude is ether horizontal or rising, which implies that the cost of capital to a firm increases as it raises larger and targer amounts of ciotal the rising sedich of MicC schedule Is corred by economies of scale in firtancing. Would be elminiled (that as, the MCc scheovile would be horzontal) if the firm retained all of its earnings. Rirsuis from a change in the debt ritio as the firm expands Cocurs because the firm must, if it is to expand, be willing to take on niskier and riskior projects, and this causes an increase in the cost of capital. Fesuits from fiotahion costs associated with the sale of new common and prefered stock, abong with higher debt costs, as the firm's rate of expansion increases Assume a propect has noemal cash fows (i e , inital cash fow is negative, and all other cash flows are positive). Which of the following statements is most ocrect? Al fise equal, a projects IRR increases as the tequired rate of rotum doctines All fise equal a propecrs NPV increases as the roqured rate of relurn decines Al thae equid, a projects ipR is unatlected by changes in the required rate of refurn. Answes a and b are botr correct Mrwwes b and e are both conect