Assuming a project has the same risk and financing as the firm, it will have a positive NPV if its rate of return is greater than the firm's WACC.
TRUE

Question

Quizplus · Accepted Answer

This is the basic rule for evaluating the NPV of a project. If the project's rate of return (or internal rate of return) is higher than the firm's cost of capital (WACC), then the project is expected to generate positive cash flows that will add value to the firm. If the project's rate of return is lower than the WACC, then the project is not expected to generate enough cash flows to cover its cost of capital and is likely to have a negative NPV.

Assuming a Project Has the Same Risk and Financing as the Firm