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    Kaliya Salimbayeva
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    This document contains three questions about evaluating investment projects using metrics like internal rate of return (IRR), weighted average cost of capital (WACC), and net present value (NPV). The first question asks which project to accept between Project A with an IRR of 15% and Project B with an IRR of 14%, given both have a WACC of 12%. The second question asks which statement is correct about projects X and Y, which both have positive NPVs but IRRs of 20% and 15% respectively. The third question asks which independent project a company should accept, given options with different IRRs, modified IRR, and NPV, and the company's W

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    This document contains three questions about evaluating investment projects using metrics like internal rate of return (IRR), weighted average cost of capital (WACC), and net present value (NPV). The first question asks which project to accept between Project A with an IRR of 15% and Project B with an IRR of 14%, given both have a WACC of 12%. The second question asks which statement is correct about projects X and Y, which both have positive NPVs but IRRs of 20% and 15% respectively. The third question asks which independent project a company should accept, given options with different IRRs, modified IRR, and NPV, and the company's W

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    18 views1 page

    Test 4

    Uploaded by

    Kaliya Salimbayeva
    This document contains three questions about evaluating investment projects using metrics like internal rate of return (IRR), weighted average cost of capital (WACC), and net present value (NPV). The first question asks which project to accept between Project A with an IRR of 15% and Project B with an IRR of 14%, given both have a WACC of 12%. The second question asks which statement is correct about projects X and Y, which both have positive NPVs but IRRs of 20% and 15% respectively. The third question asks which independent project a company should accept, given options with different IRRs, modified IRR, and NPV, and the company's W

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    inance: IRR, WACC, NPV, which project to

    accept
    Project A has an internal rate of return of 15 percent.  Project B has an IRR of 14 percent.  Both
    projects have a cost of capital of 12 percent.  Which of the following statements is most correct?

    a. Both projects have a positive net present value.


    b. Project A must have a higher NPV than Project B.
    c. If the cost of capital were less than 12 percent, Project B would have a higher IRR than Project
    A.
    d. Statements a and c are correct.
    e. Statements a, b and c are correct.

    Project X and Y have an IRR of 20% and 15% respectively. Both projects have a positive net
    present value.  Which of the following statements is most correct?

    a. Project X must have a higher NPV than Project Y.


    b. If both projects have the same WACC, Project X must have a higher NPV.
    c. Project X must have a shorter payback than Project Y.
    d. Project X payback is shorter because it considered cash flows beyond the payback period.
    e. None of the aobve answers is correct.

    A company estimates that its WACC is 10 percent.  Which of the following independent projects
    should the company accept?

    a. Project A requires an up front expenditure of $1,000,000 and generates an NPV of $3000.


    b. Project B has a modified internal rate of return of 9.5%.
    c. Project C requires and up front expenditure of $1,000,000 and generates an IRR of 9.7%.
    d. Project D has an IRR of 9.5%.
    e. None of the projects above should be accepted.

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