The division of Alpha Lid is considering a capital investment project with an initial cash outflow followed by 10 years
Posted: Tue Jul 05, 2022 11:27 am
The division of Alpha Lid is considering a capitalinvestment project with an initial cash outflow followed by 10years of cash inflows. The Internal Rate of Return (IRR) has beencalculated as X and the Discounted Payback Period (DPP) as Yyears.
Following a review by the main board of Alpha Ltdit has increased its cost of capital and accordingly Q divisionshould expect the following changes to X and Y
A. X will increase but y will not change
B. X and Y will both increase
C. X will not change but Y will decrease
D. X will not change but y willincrease
Following a review by the main board of Alpha Ltdit has increased its cost of capital and accordingly Q divisionshould expect the following changes to X and Y
A. X will increase but y will not change
B. X and Y will both increase
C. X will not change but Y will decrease
D. X will not change but y willincrease