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) the higher the cost of capital used to calculate the npv, the lower the calculated npv will be.
B) if a project's npv is greater than zero, then its irr must be less than the cost of capital.
C) if a project's npv is greater than zero, then its irr must be less than zero.
D) the npvs of relatively risky projects should be found using relatively low costs of capital.
E) a project's npv is generally found by compounding the cash inflows at the cost of capital to find the terminal value (tv) , then discounting the tv at the irr to find its pv.
Correct Answer:
Verified
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