For capital budgeting projects like the one depicted in the prior problem, which of the following statements is CORRECT? (Ch. 11) Group of answer choices The lower the required rate of return, the lower the calculated NPV. If a project’s NPV is less than zero, then its IRR must be less than the required rate of return. Generally speaking, risky projects should have very low required rates of return. A relatively high required rate of return should be used to find the NPV of a relatively low risk project. If a project’s NPV is greater than zero, then its IRR must be less than zero.
For capital budgeting projects like the one depicted in the prior problem, which of the following statements is CORRECT? (Ch. 11) Group of answer choices The lower the required rate of return, the lower the calculated NPV. If a project’s NPV is less than zero, then its IRR must be less than the required rate of return. Generally speaking, risky projects should have very low required rates of return. A relatively high required rate of return should be used to find the NPV of a relatively low risk project. If a project’s NPV is greater than zero, then its IRR must be less than zero.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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For capital budgeting projects like the one depicted in the prior problem, which of the following statements is CORRECT? (Ch. 11)
Group of answer choices
The lower the required rate of return, the lower the calculated NPV .
If a project’s NPV is less than zero, then its IRR must be less than the required rate of return.
Generally speaking, risky projects should have very low required rates of return .
A relatively high required rate of return should be used to find the NPV of a relatively low risk project.
If a project’s NPV is greater than zero, then its IRR must be less than zero.
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