Answered: Which of the following is CORRECT?…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 4Q

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Which of the following is CORRECT?

Select one:

a. If the NPV of a project is negative, the IRR for the project must also be negative.

b. A project's MIRR can never exceed its IRR.

c. If a project with normal cash flows has an IRR less than WACC, the project must have a positive NPV.

d. If Project 1's IRR exceeds Project 2's IRR, then 1 must have a higher NPV than 2.

e. If a project with normal cash flows has an IRR greater than WACC, the project must have a positive NPV.

You purchase a house for $250,000. After you make your down payment of $50,000, you are financing $200,000 for 30 years at an annual percentage rate of 5.4%. How much are your monthly payments?

Select one:

a. Less than $1,000

b. Between $1,000 and $1,050

c. Between $1,050 and $1,100

d. Between $1,100 and $1,150

e. Greater than $1,200

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