For capital budgeting projects, which of the following statements is CORRECT? Group of answer choices An extremely high required rate of return should be used to find the NPV of a relatively low risk project. All of these answer choices are correct. If a project’s NPV is less than zero, then its IRR must be less than the required rate of return. If a project’s NPV is greater than zero, then its IRR must be less than zero. The lower the required rate of return, the lower the calculated NPV

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter12: Capital Investment Decisions
Section: Chapter Questions
Problem 16MCQ: Using IRR, a project is rejected if the IRR a. is equal to the required rate of return. b. is less...
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For capital budgeting projects, which of the following statements is CORRECT?

Group of answer choices
An extremely high required rate of return should be used to find the NPV of a relatively low risk project.
All of these answer choices are correct.
If a project’s NPV is less than zero, then its IRR must be less than the required rate of return.
If a project’s NPV is greater than zero, then its IRR must be less than zero.
The lower the required rate of return, the lower the calculated NPV.
 
 
 
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