Which of the following statements is CORRECT?

Question

Quizplus · Accepted Answer

When a project with normal cash flows has an IRR greater than the cost of capital, it means that the project is generating returns that are greater than the cost of capital, and hence it must also have a positive NPV. Therefore, statement E is correct. Option A is not always correct because IRR relies on cash flows, timing, and duration of a project, and NPV relies on the project's cost of capital. Statement B is incorrect because MIRR can exceed IRR if the project's cash flows are reinvested at the cost of capital. Option C is also not always correct because the NPV could be negative if a project generates cash flows less than the cost of capital. Statement D is incorrect because the NPV and IRR of a project may not always have a one-to-one relationship.

Which of the Following Statements Is CORRECT