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- Which of the following statements is CORRECT? O Projects with "normal" cash flows can have two or more real IRRS. O Projects with "normal" cash flows must have two changes in the sign of the cash flows, e.g., from negative to positive to negative. If there are more than two sign changes, then the cash flow stream is "nonnormal." O The "multiple IRR problem" can arise if a project's cash flows are "normal." O Projects with "nonnormal" cash flows are almost never encountered in the real world. O Projects with "normal" cash flows can have only one real IRR.The waterfall structure implies that during the construction phase of the project gross operating cashflow will be zero Select one: True O FalseAnwer quickly please. A project having the conventional pattern of cash flows exhibits all the following EXCEPT: a. Terminal cash flow b. Initial investment c. Operating cash inflows d. Operating cash outflows
- The payback criterion has problem(s) like Select one: O A. It considers the time value of money O B. It ignores the cash outflows or inflows after the payback period and the time value of money O C. It considers the inflows and outflows after the Payback Period O D. It considers all the cash outflows or inflows of the projectBreakeven cash inflow refers to ________. the minimum level of cash inflow necessary for a project to be acceptable, that is, NPV greater than or equal to zero the minimum level of cash inflow necessary for a project to be acceptable, that is, IRR less than zero cost of capital the minimum level of cash inflow necessary for a project to be acceptable, that is, IRR equals zero the minimum level of cash inflow necessary for a project to be acceptable, that is, NPV less than zeroAssume that both Projects A and B have normal cash flows, with one outflow followed by a series of inflows. Which of the following statements is CORRECT? a. If Project A's IRR exceeds its cost of capital, then the project A's NPV must be positive. b. The IRR calculation implicitly assumes that all cash flows are reinvested at the cost of capital. c. If Project A has a higher IRR than Project B, then Project A must have the lower NPV. d. If Project A has a higher IRR than Project B, then Project A must also have a higher NPV. e. If Project A has a lower IRR than Project B, then Project A must also have a lower NPV.
- Assume a project has normal cash flows (i.e. the initial cash flow is negative and all other cash flows are positive). Which of the following statements is most correct? All else equal, a project’s IRR increases as the cost of capital declines. All else equal, a project’s NPV increases as the cost of capital declines. All else equal, a project’s MIRR is unaffected by changes in the cost of capital. None of the aboveAn investment is guaranteed to have a unique value of IRR if which of the following is true? a. Alternating positive and negative cash flows b. An initial negative cash flow followed by all positive cash flows and the sum of the positive cash flows is greater than the magnitude of the negative cash flow c. A unique value for ERR d. A positive PW at MARR.Flew 7. Flw d) Flar
- A. Using AW, determine whether this proposal is acceptable. B. What is the ERR of this proposal? Is it acceptable? C. What is the IRR of this proposal? Is it acceptable? Show the cash flow diagram if necessary and complete solution. Do not use excel please. Thank you.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. If Project A has a higher IRR than Project B, then Project A must also have a higher NPV. b. If a project has normal cash flows and its IRR exceeds its cost of capital, then the project's NPV must be positive. c. The IRR calculation implicitly assumes that all cash flows are reinvested at the cost of capital. d. If Project A has a higher IRR than Project B, then Project A must have the lower NPV. e. The IRR calculation implicitly assumes that cash flows are withdrawn from the business rather than being reinvested in the business.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. I. One defect of the IRR method is that it does not take account of the time value of money. II. One defect of the IRR method is that it does not take account of the cost of capital. III. A project's IRR is the discount rate that causes the PV of the inflows to equal the project's cost. O I and III only SO I only O I, II and III O II and III only O III only