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Multiple choice conceptual date created 6232015 326

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Multiple Choice: ConceptualDATE CREATED:6/23/2015 3:26 PMDATE MODIFIED:6/23/2015 3:26 PM42. Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT?a. A project’s IRR increases as the WACC declines.b. A project’s NPV increases as the WACC declines.c. A project’s MIRR is unaffected by changes in the WACC.d. A project’s regular payback increases as the WACC declines.e. A project’s discounted payback increases as the WACC declines.
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Chapter 11: The Basics of Capital BudgetingANSWER:b
DIFFICULTY:EASYREFERENCES:ComprehensiveQUESTION TYPE:Multiple ChoiceLEARNING OBJECTIVES:FOFM.BRIG.17.11.00 - ComprehensiveNATIONAL STANDARDS:United States - BUSPROG.FOFM.BRIG.17.03 - BUSPROG: AnalyticSTATE STANDARDS:United States - OH - DISC.FOFM.BRIG.17.03 - Capital budgeting and cost ofcapitalTOPICS:Ranking methodsKEYWORDS:Bloom's: ComprehensionOTHER:Multiple Choice: ConceptualDATE CREATED:6/23/2015 3:26 PMDATE MODIFIED:6/23/2015 3:26 PM43. Which of the following statements is CORRECT?d
DIFFICULTY:EASYREFERENCES:ComprehensiveQUESTION TYPE:Multiple ChoiceLEARNING OBJECTIVES:FOFM.BRIG.17.11.00 - ComprehensiveNATIONAL STANDARDS:United States - BUSPROG.FOFM.BRIG.17.03 - BUSPROG: AnalyticSTATE STANDARDS:United States - OH - DISC.FOFM.BRIG.17.03 - Capital budgeting and cost ofcapitalTOPICS:Ranking methodsKEYWORDS:Bloom's: ComprehensionOTHER:Multiple Choice: ConceptualDATE CREATED:6/23/2015 3:26 PMDATE MODIFIED:6/23/2015 3:26 PM44. Which of the following statements is CORRECT?
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Chapter 11: The Basics of Capital Budgetingd. An NPV profile graph is designed to give decision makers an idea about how a project’s contribution to thefirm’s value varies with the cost of capital.e. We cannot draw a project’s NPV profile unless we know the appropriate WACC for use in evaluating theproject’s NPV.ANSWER:dDIFFICULTY:EASY/MODERATEREFERENCES:11-7 NPV ProfilesQUESTION TYPE:

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