QUESTION 1

1. Which statement about a projects IRR is correct? Assume that all projects being considered have normal cash flows and are equally risky.

   		There is no necessary relationship between a projects IRR, its WACC, and its NPV.
   		If a projects IRR is equal to its WACC, then, under all reasonable conditions, the projects NPV must be negative.
   		If a projects IRR is equal to its WACC, then, under all reasonable conditions, the projects IRR must be negative.
   		If a projects IRR is equal to its WACC, then, under all reasonable conditions, the projects NPV must be zero.

1 points

QUESTION 2

1. Which statement about a projects MIRR is correct? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.

   		A projects MIRR is always greater than its regular IRR.
   		A projects MIRR is always less than its regular IRR.
   		If a projects IRR is greater than its WACC, then the MIRR will be greater than the IRR.
   		If a projects IRR is greater than its WACC, then the MIRR will be less than the IRR.

1 points

QUESTION 3

1. Projects C and D are mutually exclusive and have normal cash flows. Project C has a higher NPV if the WACC is less than 12%, whereas Project D has a higher NPV if the WACC exceeds 12%. Which of the following statements is correct?

   		Project D has a higher IRR.
   		Project C has a higher IRR.
   		Project C probably has a faster payback.
   		Project D is probably larger in scale than Project C.

1 points

QUESTION 4

1. Which of the following is CORRECT regarding a projects NPV?

   		If a projects NPV is greater than zero, the project should be accepted.
   		If a projects NPV is less than its IRR, then the project should be accepted.
   		If a projects NPV exceeds its IRR, then the project should be rejected
   		If a projects NPV exceeds its IRR, then the project should be accepted.