Which of the following statements is CORRECT? Assume that all projects being considered have normal cash flows and are equally risky.
A) If a project's IRR is equal to its WACC, then under all reasonable conditions, the project's IRR must be negative.
B) If a project's IRR is equal to its WACC, then under all reasonable conditions the project's NPV must be zero.
C) There is no necessary relationship between a project's IRR, its WACC, and its NPV.
D) When evaluating mutually exclusive projects, those projects with relatively long lives will tend to have relatively high NPVs when the cost of capital is relatively high.
E) If a project's IRR is equal to its WACC, then, under all reasonable conditions, the project's NPV must be negative.

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Quizplus · Accepted Answer

11ea42d0_c08c_4390_9abf_03fd3bdd599a_TB2090_00 Recall that the very definition of the IRR is the discount rate at which the NPV is zero.Therefore,statement b is true.The other statements are false.

Which of the Following Statements Is CORRECT? Assume That All