Project has normal cash flows
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Assume a project has normal cash flows. All else equal, which of the following statements is correct?
-The projects IRR increases as the WACC declines
- The projects NPV increases as the WACC declines
- The projects MIRR is unaffected by changes in WACC
-The projects regular payback increases as the WACC declines
-The projects discounted payback increases as the WACC declines
3) The regular payback method has a number of disadvantages, some of which are listed below, Which of these items is not a disadvantage of this method?
- lack of objective,market determined benchmark for making decisions
- Ignores cash flows beyond the payback period
- Does not directly account for the time value of money
-does not provide any indication regarding a projects liquidity
- does not directly account for differences in risk among projects
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The solution examines a project with normal cash flows.
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) Assume a project has normal cash flows. All else equal, which of the following statements is correct?
-The projects IRR increases as the WACC declines
- The projects NPV increases as the WACC declines
- The projects MIRR is unaffected by ...
Purchase this Solution
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