Question 14Which of the following statements is CORRECT? Assume that t

QUESTION

Question 14Which 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.AnswerSA projects regular IRR is found by compounding the cash inflows at t
Question 14: A projects regular IRR is found by compounding the cash inflows at the WACC to find the terminal value (TV), then discounting this TV at the WACC. Question 15: One defect of the IRR method is that it assumes that the cash flows to be received from a project can be

invested at the IRR itself, and that assumption is often not valid. Question 16: If a projects payback is positive, then the project should be rejected because it must have a negative NPV.

ANSWER:

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