Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.
A. If Project A has a higher IRR than Project B, then Project A must have the lower NPV.
B. If Project A has a higher IRR than Project B, then Project A must also have a higher NPV.
C. The IRR calculation implicitly assumes that all cash flows are reinvested at the WACC.
D. The IRR calculation implicitly assumes that cash flows are withdrawn from the business rather than being reinvested in the business.
E. If a project has normal cash flows and its IRR exceeds its WACC, then the project's NPV must be positive.
Answer: E
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A) equilateral B) vertical C) multitiered D) communal E) horizontal
By relying on objective information to build support for an initiative, a manager
A. can ensure everyone's personal interests are considered. B. causes others to believe that what the manager is proposing is the appropriate or rational thing to do. C. can develop mutually beneficial relationships with people both inside and outside the organization. D. generates knowledge in all aspects of the organization. E. ensures that everyone who supports the proposal benefits personally.