When the present value of the cash inflows is less than the initial cost of...
60.1K
Verified Solution
Link Copied!
Question
Finance
When the present value of the cash inflows is less than the initial cost of a project, then the project should be: A) accepted because the internal rate of return is positive. B) accepted because the net present value is positive. C) rejected because the internal rate of return is negative. D) rejected because the net present value is negative. C and D above are correct. Which of the following statements is correct? Other things equal, the NPV increases as the cost of capital increases. The cost of capital for Project S should be higher if Project S is considered a low-risk project. Other things equal, the IRR increases as the cost of capital increases. The possibility to accept Project S decreases if the cost of capital increases. Based on the NPV method, the firm should reject Project S
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
