Answer Happy

Question 29 (3.125 points) Which of the following statements is CORRECT? A project's regular IRR is found by compounding the initial cost at the WACC to find the terminal value (TV), then discounting the TV at the WACC. The IRR assumes reinvestment at the WACC, and that is generally not as valid as assuming reinvestment at the IRR, which is the reinvestment rate assumption of the NPV method. Assume a project has normal cash flows. The project's IRR increases as the WACC declines. A project's MIRR is the discount rate that causes the PV of the inflows to equal the project's cost. If a project's NPV is greater than zero, then its IRR must be greater than the WACC.