BANK ID 269608 TYPE MULTIPLE CHOICE CORRECT Which of the following statements

# Bank id 269608 type multiple choice correct which of

• Test Prep
• 8
• 100% (34) 34 out of 34 people found this document helpful

This preview shows page 4 - 7 out of 8 pages.

QUESTION:7[QUESTION BANK ID:269608]TYPE:MULTIPLE CHOICECORRECTWhich 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. AA project’s regular IRR is found by compounding the cash inflows at the WACC to find the terminal value (TV), then discounting this TV at the WACCBA project’s regular IRR is found by discounting the cash inflows at the WACC to find the present value (PV), then compounding this PV to find the IRRCIf a project’s IRR is greater than the WACC, then its NPV must be negativeDTo find a project’s IRR, we must solve for the discount rate that causes the PV of the inflows to equal the project’s costsETo find a project’s IRR, we must find a discount rate that is equal to the WACC QUESTION:8[QUESTION BANK ID:269452]TYPE:MULTIPLE CHOICECORRECTAssume both corporate taxes and financial distress costs apply to a firm. Given this, the tradeoff theory of capital structure illustrates that
QUESTION:9[QUESTION BANK ID:269603]TYPE:MULTIPLE CHOICECORRECTWhich of the following statements is correct? QUESTION:10[QUESTION BANK ID:269414]TYPE:MULTIPLE CHOICECORRECTWhich of the following statements is correct?
• • • 